Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — EMPLOYMENT

Wages Councils

Mr. Marlow: To ask the Secretary of State for Employment if he has reached any conclusions on the future of wages councils following the public consultation; and if he will make a statement.

The Minister of State, Department of Employment (Mr. John Cope): My hon. Friend will have seen from the answer that I gave on 21 March to a similar question from my hon. Friend the Member for Mid-Kent (Mr. Rowe) that a decision on the future of the wages councils will be taken later this year.

Mr. Marlow: In view of the Government's massive majority last night, does my right hon. Friend feel that he will be able to secure a majority to get rid of this further legislative relic of the decaying vegetation of socialism? Can my right hon. Friend reassure the House that he has another secret and sudden Bill, dripping wet with printer's ink, to bring before an eager and expectant House?

Mr. Cope: The only assurance that I can give my hon. Friend and the House is that no final decision has yet been taken, but that it will be taken later in the year.

Mr. John Evans: Is it not a scandal that a number of employers pay their employees less than the wages councils' statutory minimum wage? If the Government abolish the wages council, what steps do they intend to take to protect people from such vicious exploitation?

Mr. Cope: Last year about 97 per cent. of the workers in wages councils industries were paid at least the minimum due. That is the result of recent inspections. However, we must also balance job prospects and numbers of jobs, as well as the considerations mentioned by the hon. Gentleman.

Mr. Budgen: Was not the original idea of the wages councils to protect the weakest employees who might not be able to negotiate adequately with their employers, and wast not the compromise by which young employees were taken out of the wages councils a ridiculous and illogical one? Should not the Government now move towards straightforward abolition?

Mr. Cope: It was a sensible thing to do at the time, but it is right to review the position now.

Mr. Tony Lloyd: Recognising that there is once again a considerable head of steam among Conservative Members for the abolition of this so-called decaying vegetation of socialism, will the Minister explain why, in consultation exercises, virtually all those who responded from various industries were unhappy about the abolition of the wages councils?

Mr. Cope: On the contrary, in the six largest councils, which represent about 94 per cent. of all workers covered by wages councils, a majority of the employer bodies wanted abolition.

Mr. Gregory: Does my right hon. Friend agree that many of the wages councils are anachronistic? Few Members represent people who work, for example, in the area covered by the ostrich feather and artificial fancy flower wages council?

Mr. Cope: Yes, there are a number of small wages councils in rather exotic industries.

Mines and Quarries Inspectors

Mr. Allen McKay: To ask the Secretary of State for Employment how many mines inspectors and quarries inspectors the Health and safety Executive had in place on 1 April.

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): On 1 April 1989 the Health and Safety Executive employed 58 mines inspectors and 11 quarries inspectors.

Mr. McKay: In what disciplines are the mines inspectors placed and where are the specialist services based?

Mr. Nicholls: The inspectors are trained in specialties appropriate to their tasks. It may be of particular interest to the hon. Gentleman to know that in the past three years the ratio of mines inspectors to workers in British Coal mines has improved from one to 1,790 to one to 1,679. I am sure that the hon. Gentleman will agree that that is a most welcome improvement.

Mr. Strang: Will the Minister acknowledge that accident rates are higher among the employees of the private contractors in British Coal collieries, and higher still among employees in the private licensed mines? The proposal to abolish the statutory health and safety responsibilities of the pit deputy is utterly unacceptable and we are not prepared to see a reduction in health and safety standards with the increase in accidents and deaths that it must entail, to prepare the way for privatisation of the industry.

Mr. Nicholls: I appreciate the hon. Gentleman's concern on the latter point, but I know of no such proposal. I also agree that the accident rate in licensed mines, which is running at a higher rate than that in the industry generally, is a cause for concern. It is difficult to discern any particular reason for it, but certain things a re clear—they tend to be smaller enterprises, in some cases technology and high technology may not be in use to the same extent, and the seams may be difficult to work. We share the hon. Gentleman's concern, and the inspectorate


has had a number of constructive meetings with the Federation of Licensed Mines to see whether anything can be done.

Training and Enterprise Councils

Mr. David Nicholson: To ask the Secretary of State for Employment how many representations he has received from chambers of commerce on his proposals to introduce training and enterprise councils.

The Secretary of State for Employment (Mr. Norman Fowler): Since the White Paper "Employment for the 1990s" was published on 5 December last year, almost 4,000 individuals and organisations have expressed an interest in training and enterprise councils. Of these, 87 approaches have been from chambers of commerce.

Mr. Nicholson: Will my right hon. Friend confirm that industry contributes some £15 billion per year in training employees and that the extra £3 billion from the Government, plus the direction of training being given to industry, will be a recipe for success? Does he agree, however, that the continuing support and working co-operation of local business as represented separately by bodies such as chambers of commerce, is also essential for success?

Mr. Fowler: I entirely agree with both the points that my hon. Friend, with his considerable experience of the chamber of commerce movement, has put to me. Employers are now investing more than £18 billion a year in training. That is a substantial increase, but I entirely agree that the success of training and enterprise councils will depend heavily on the support that they receive not just from employers but from everyone in the local community.

Mr. Wallace: I am sure that the Secretary of State is anxious that the business men who come forward should be of the highest calibre, but is he not concerned that many of them, as a result of their success, will not have the time to devote to training? What quality control procedure will there be to ensure the standard of training provision is of a uniformly high standard throughout the country, and not patchy, with variations from area to area?

Mr. Fowler: National standards of training will, of course, continue. That is crucially important. Training and enterprise councils, however, are concerned with the local delivery of training. I believe that our proposals will enable leaders of business locally to be used, as it were, as boards of directors while Training Agency staff can be seconded to the councils. In that way, we shall have the best of both worlds.

Mr. Beaumont-Dark: Does my right hon. Friend agree that one of the tragedies of training has been that the trade unions have helped to destroy the apprenticeship system, because they wanted young people to be paid too much of the skilled wage at the beginning? Is there any more accord now? Do the trade unions intend to help the scheme on its way so that people will be trained and have real jobs when they have finished that training?

Mr. Fowler: I very much hope that that is the case. Training and enterprise councils have not been a matter of controversy between Government and trade unions or, indeed, with other organisations. One of the areas in which

the councils should work quickly and well is my hon. Friend's own city of Birmingham, where employers and unions have a good working relationship, and I should like to see that continue.

Mr. Meacher: After the fiascos of the job training scheme, which achieved only a quarter of its targeted number of places, and employment training, which achieved only half the targeted number, why should the training and enterprise councils do any better when they have no extra funding, unbalanced and unrepresentative membership, and no public accountability for the public funds provided?

Mr. Fowler: The most indicative thing about the hon. Gentleman is that he seeks to attack every training initiative that has been made over the past two years. [HON. MEMBERS: "Answer the question."] I will give the hon. Gentleman the facts, so that he will know them in future. The fact is that some 180,000 people are now on employment training schemes. They have taken absolutely no notice of the hon. Gentleman's advice, and I advise the public to do the same.

Labour Statistics

Mr. Tredinnick: To ask the Secretary of State for Employment what has been the fall in unemployment in the east midlands during the last 12 months for which figures are available; and if he will make a statement.

The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): In the 12 months to March 1989 the level of unemployment, seasonally adjusted, in the east midlands fell by 34,500 or 22·6 per cent. on a consistent basis. Unemployment in the east midlands is now at its lowest level for more than eight years, as it is in the country as a whole.

Mr. Tredinnick: Has my hon. Friend noted the astonishing fall in unemployment in my constituency of Bosworth of 41 per cent. in the past 12 months? Does he agree that that success is partly due to the policies of Hinckley and Bosworth borough council, the Conservative-controlled council with the lowest rates in the east midlands? Does he further agree that that trend is reflected throughout the east midlands?

Mr. Lee: I agree with all that my hon. Friend has said. The civilian work force in the east midlands is 1,844,000 —the highest level ever.

Mr. Allen: Will the Minister tell us the real unemployment figure, without the 19 different fiddles that he has introduced? When does he estimate that the unemployment figures will get back to 1979 levels?

Mr. Lee: Unemployment in the hon. Gentleman's constituency in the two years to March 1989 has fallen by 29·1 per cent.

Mr. Boswell: Has my hon. Friend noticed that unemployment in the two years to March 1989 has fallen to a new low? Has he any explanation as to how that could have happened?

Mr. Lee: I can only assume that it is a combination of the Government's economic policy and the very sound judgment of my hon. Friend's constituents when they elected him as their Member of Parliament.

Mr. Haynes: Is the Minister aware that there have been a number of pit closures in my constituency of Ashfield because of his Government's policy? Is he aware that at Stanton Hill in my constituency the pit is to close in August and there is no other industry? What is the Department of Employment doing to convince the chairman of British Coal to back off and instead of selling that land for housing development let us have some industrial units? Nottinghamshire county council is interested in doing just that. The Minister should pull his socks up and do something about it.

Mr. Lee: I wish that the hon. Gentleman, in his own inimitable style, would shout from the rooftops that in the two years to March 1989 unemployment in his constituency has fallen by 24·4 per cent.

Mr. Aspinwall: To ask the Secretary of State for Employment if he will make a statement on the level of employment in the south-west of England.

Mr. Lee: In December 1988, the latest date for which figures are available, the civilian work force in employment in the south-west region was 1,965,000. That represents an increase of 213,000 or 12 per cent. since December 1983.

Mr. Aspinwall: Does my hon. Friend agree that the fall in unemployment of 213,000 reflects the strength of the small business sector in the community in the south-west? Is he aware that the Wansdyke enterprise agency in my constituency has made a considerable contribution to promoting small businesses? How does the Minister intend to support that and other enterprise agencies in the south-west?

Mr. Lee: On the first point, my hon. Friend is right. Self-employment in the south-west increased by 82 per cent. between December 1979 and December 1988. I know how supportive my hon. Friend has been of the Wansdyke enterprise agency and I understand that he is the honorary president of that organisation. The Government consider that the Wansdyke enterprise agency is doing a good job. We have put in substantial amounts of pump-priming money, but the future for financing the enterprise agency increasingly lies with the private sector and we hope that the enterprise agency will be successful in raising more support from that source.

Mr. Campbell-Savours: Of the 213,000 people who found jobs in the south-west of England, where there are a lot of Labour voters, how many were in part-time jobs and for how many was the pay so low that they had to inquire about family credit?

Mr. Lee: It is impossible to answer that question.

Mr. Harris: I very much welcome the figures given by my hon. Friend, but does he agree that training plays an important part and that the need for training is great in the south-west, especially in Cornwall? In that context, although completely rejecting suggestions that the Government are somehow to blame for the rejection of Cornwall county council's applications for the European social fund, will my hon. Friend nevertheless redouble his Department's efforts to ensure that those applications are reconsidered by the Commission in Brussels?

Mr. Lee: We are, of course, supportive of training and we hope that there will be a satisfactory and keen response

from the private sector in the south-west—and especially in Cornwall—to the opportunity for the development of training and enterprise councils. I note what my hon. Friend says about European funding, but I have nothing to add to the reply that my right hon. Friend the Minister of State gave to my hon. Friend last Friday.

Mr. Bellingham: To ask the Secretary of State for Employment if he will make a statement on the current level of employment in the United Kingdom.

Mr. Fowler: Between March 1983 and December 1988, the work force in employment in the United Kingdom increased be almost 3 million to more than 26.5 million —the highest level on record in this country.

Mr. Bellingham: Is my right hon. Friend aware that in west Norfolk unemployment has fallen by 18 per cent. —to 5·9 per cent.—as a result of the growth in enterprise and small businesses and that that will be enormously assisted by the recent announcement by our right hon. Friend the Secretary of State for Transport that the railway line to King's Lynn is to be electrified? Can my right hon. Friend tell the House whether the encouraging growth in self-employment locally has been reflected in the rest of the country?

Mr. Fowler: There has been a substantial increase in self-employment, which has undoubtedly been one of the most important elements in the growth of employment. Between 1983 and 1988, there was an increase of about 840,000 in the number of self-employed.

Ms. Short: Does the Secretary of State know that all over the developed world there has been an increase in the participation rate, with more and more women coming into the labour force? Our record is worse than that of any other country in terms of the growth of low-paid employment. Almost the majority of our work force is now low paid. Does the Secretary of State not understand that our high participation rate is a measure of underdevelopment? There are now more young people in higher education in South Korea than in Britain. The figures are nothing to boast about—they are a measure of our decline.

Mr. Fowler: I do not accept what the hon. Lady says. International comparisons in the growth of employment show that the increase in numbers in employment between 1983 and 1987 in the United Kingdom equals that of the rest of the European Community combined. That is the measure of our success.

Mr. Simon Coombs: Will my right hon. Friend confirm that the proportion of the population of working age in employment in the United Kingdom is now 66 per cent.? How does that compare with other countries in the European Community?

Mr. Fowler: It is higher than in the European Community. The point that the hon. Lady made about women in employment was equally dud. The participation rate among women in this country is much higher than in almost every other European country.

Mr. Janner: Is the Secretary of State aware that the unemployment rate in parts of my constituency remains more than a third, especially on major estates such as Braunstone, Beaumont Leys, Mowmaker, Stocking Farm and New Parks? Is he aware that on 4 May my


constituents there will show what they think of the Government at the county council election, when they will have the chance to express their views through their votes?

Mr. Fowler: Like the hon. and learned Gentleman, I look forward to that election. He omitted to mention that unemployment in his area has fallen by 34 per cent. in the past two years.

Mr. Jacques Arnold: Does my right hon. Friend agree that there are bright prospects for increasing employment in our traditional port areas arising from the abolition of the national dock labour scheme and that a dock strike would damage those prospects?

Mr. Fowler: I agree with both those points and I congratulate my hon. Friend on getting in the points that he was prevented by the Opposition Front Bench from making last night.

Environmental Assessments

Mr. Vaz: To ask the Secretary of State for Employment what training and information has been given to the agricultural inspectorate on environmental assessment associated with the Food and Environment Protection Act.

Mr. Hood: To ask the Secretary of State for Employment what training and information has been given to the agricultural inspectorate on environmental assessment associated with the Food and Environment Protection Act.

Mr. Nicholls: Prior to undertaking their enforcement responsibilities under the Food and Environment Protection Act 1985, the Health and Safety Executive's agricultural inspectors are given a week's specific training on the requirements and implications of the Act. This is supplemented as required by further local and national training.

Mr. Vaz: What publications have been made available to the agricultural inspectorate to assist it with this important work?

Mr. Nicholls: The full resources of the service are available to inspectors to enable them to equip themselves for the task. It is important to note that if they require specialised or specialist help in their investigations there are a number of agencies they can contact to provide that specific help.

Mr. Hood: Is the Minister aware of the great public concern about the harmful effects of pesticide residues coming into our food chain? Knowing that, what are the Government doing to provide more resources to help the agriculture inspectors to carry out their extra responsibilities?

Mr. Nicholls: The hon. Gentleman is entirely right to voice that public concern. It was to address that concern that the Food and Environment Protection Act and the structures under it were introduced. The resources now applied generally to the Health and Safety Executive compare in real terms as favourably, if not more so, with those given by the Labour Government.

Mr. Paice: Is it not the case that without the development of a range of "responsible" pesticides in the

past few years this country might have gone hungry? Instead of condemning all pesticides, should we not concentrate on adequate testing to find out which ones may be damaging, if at all, either to people or to the environment and concentrate on weeding them out instead of building up an anti-pesticide hype across the whole spectrum?

Mr. Nicholls: I am sure that my hon. Friend is entirely right. It is too easy to forget that the whole idea of a pesticide is to kill pests and that to that extent it must obviously be a dangerous and deleterious chemical. The effect of the advisory committee on pesticides is to ensure that only safe products are launched on the market and, perhaps more importantly, to ensure that the position can be reviewed as and when necessary in the light of increased knowledge.

Service Industries

Mr. John Evans: To ask the Secretary of State for Employment how many people have been employed in service industries in the north-west region in each of the last three years, expressed as a proportion of the labour force; and if he will give comparable figures for the south-east.

Mr. Lee: In each of the past three years, about two thirds of all employees in employment in the north-west were in service industries, compared with three quarters of all employees in employment in the south-east.

Mr. Evans: Does the Minister acknowledge that well-paid service jobs have mushroomed in the south-east to offset the decline in manufacturing, but that although manufacturing jobs have also collapsed in the north-west there has been no such growth in well-paid service jobs in that area? What plans does the Minister have to create a fairer distribution of those well-paid service jobs to areas such as the north-west?

Mr. Lee: The hon. Gentleman is not being his usual fair and generous self. There has been a rise in employment in service industries in the north-west of about 7 per cent. The hon. Gentleman must not confuse the prosperity of manufacturing industry with the numbers of people actually employed in manufacturing. I take the example of Pilkington, a company that he knows well in his constituency and which he frequently and rightly praises. Employment in that key manufacturing company has fallen from 18,000 in 1980 to about 6,000 now.

Mr. Rowe: Does my hon. Friend accept that as part of the tremendous success of the Government's economic and employment policies, the position in the south-east has changed dramatically? Does he also accept that many people in the south-east would not mind at all if some Government jobs were moved further north? Will he assure us that he and his colleagues in the Government will look again at the south-east, which has for too long been regarded as the place with the highest standard of living in the United Kingdom but which is under enormous pressures for a variety of reasons and requires a new look to be taken at it?

Mr. Lee: My hon. Friend is right. Curiously enough, yesterday, when I was in Oldham opening the fifth "Industrious Oldham Exhibition", I came across a


manufacturer who some years ago had moved his manufacturing plant from Kent to Oldham. He had no regrets at all about the move. He is prospering in the constituency of the hon. Member for Oldham, Central and Royton (Mr. Lamond).

Mr. James Lamond: The Minister was welcomed in Oldham, where he saw the Labour council's efforts to attract manufacturing jobs to the area. However, will he reconsider his answer to my hon. Friend the Member for St. Helens, North (Mr. Evans)? It was difficult to follow the Minister, but perhaps he meant that the unfortunate result of investment in manufacturing industry—such as in Pilkingtons and in textiles—has frequently been that, despite the prosperity, the numbers of employed in those industries have fallen. If that is what the Minister is saying, does that not reinforce my hon. Friend's point that well-paid service jobs are needed in the north-west even more than they are in the south?

Mr. Lee: I am glad to see that Opposition Members advocate the creation and support of well-paid service industry jobs, because that was precisely the point that I was endeavouring to get across. Perhaps, I did not completely succeed. I repeat that we must separate the prosperity of manufacturing industry from the numbers directly employed in it, which was why I gave Pilkingtons as an example. A service industry in the north-west that I know very well is the tourism and hospitality industry, jobs in that sector have increased considerably. Nearly 150,000 people are employed in tourism and hospitality in the north-west.

Mr. Neil Hamilton: Does my hon. Friend agree that it is most unfortunate that Opposition Members constantly talk down the north-west? Parts of the north-west, such as Cheshire, are booming because of the vast increase in service jobs. Certainly in my constituency, banks, insurance companies and a vast number of other firms are bringing many service jobs into the area. It does us no good to have the north-west constantly unfavourably compared with the south-east. In fact, parts of the north-west, because of prosperity, are exhibiting the same kind of strains as the south-east.

Mr. Lee: My hon. Friend is right, but he should not, with respect, expect too much from the Opposition too quickly. We have at least now an acknowledgement that well-paid service jobs are important.

Training

Mr. Favell: To ask the Secretary of State for Employment if he will provide comparable figures on training in 1979 and estimated for 1988; and if he will make a statement.

Mr, Fowler: In 1979–80 some 91,000 adults entered Government training programmes and 216,000 school-leavers entered YOP, of whom 31,000 were given off-the-job training. In 1987–88 about 887,000 adults and young people started on . Government training programmes.

Mr. Favell: Will my right hon. Friend spell out the significance of those figures to the Opposition, who, like a pushmi-pullyu, one moment condemn every measure brought forward by the Government for training and the

next bemoan the lack of Government interest in training? Will my right hon. Friend say something about his plans for the training of the self-employed?

Mr. Fowler: The business growth training programme is certainly being introduced for helping with the training of self-employed people. I believe that that will be an important innovation for them. On the question of training figures, perhaps the most important aspect is that more young people are now undergoing training than ever before in our history.

Mr. Eastham: Is the Minister not projecting a jaundiced picture when he talks about the number of people being trained under this Government? Is it not a fact that very often training is a convenient cover-up for the massive unemployment figures? Is it not also a fact that the apprentice training schemes, which we used to have in 1979, are now practically non-existent?

Mr. Fowler: The hon. Gentleman is wrong on both counts. According to the labour force survey, something like 328,000 people are covered by apprenticeships. What is of even more importance is the quality of the scheme for young people and the latest figures show that 85 per cent. of those who have completed YTS go into jobs or into further education. I would have thought that the hon. Gentleman would welcome that.

Mr. Andrew MacKay: In spite of the impressive training figures, does my right hon. Friend agree that we still have serious skill shortages? With falling unemployment, does he agree that the best way to resolve that problem is to encourage people to stay at work longer and to cut out the tax breaks previously given to those who take early retirement?

Mr. Fowler: One future development will be that more people will stay on at work for longer, if that is their wish. The policies of companies should be engineered to enable that to happen and to put more value on the experience of older workers.

Mr. Fatchett: How does the Secretary of State reconcile his response, which was a typical exercise in self-congratulation, with the CBI's recent statement that there it an unprecedented shortage of skills in our economy and that, since the CBI has collected those figures, the situation has never been more grave? Is it not the case that the Government have always seen training as a means of massaging the unemployment figures rather than as a means of dealing with skill shortages and giving our people the skills that they deserve so that they can do proper jobs?

Mr. Fowler: The hon. Gentleman is wrong. The CBI backs in full—I regret that the hon. Member for Oldham, West (Mr. Meacher) does not—the training and enterprise councils, which are designed to create more and better training.
I do not believe that the hon. Gentleman heard what I said about training for employment, because of those people on YTS, 85 per cent. are now going into jobs or into further education. I believe that employment training will have a similar success.

Labour Force Survey

Mr. Stevens: To ask the Secretary of State for Employment how many representations he has received following the publication of the labour force survey; and if he will make a statement on its conclusions.

Mr. Fowler: The 1988 labour force survey was published in March and since then I have received a number of communications on it.
The survey results confirm that there has been a continued and strong growth in employment. Between spring 1987 and spring 1988 employment increased by 682,000, of which 60 per cent. was among full-time employees; self-employment grew by 160,000, continuing the upward trend of recent years and unemployment fell by more than ½ million and remained at a lower level than the monthly unemployment count.
The survey confirmed the picture of rapidly falling unemployment recorded by the monthly unemployment count.—f [Interruption.]

Mr. Speaker: Order. There seems to be an undercurrent of discussion. Hon. Members should kindly listen.

Mr. Stevens: I thank my right hon. Friend for that substantial reply. In the Employment Gazette did my right hon. Friend notice the figures that showed that 4·8 million people of working age received training and education courses in 1986 compared to 2·1 million in 1984? Does my right hon. Friend agree that those figures, taken with the labour force survey, the International Labour Organisation and OECD estimates of unemployment, show that the claims about unemployment and training levels made by Opposition Front-Bench spokesmen to be just mischievous nonsense?

Mr. Fowler: Yes. My hon. Friend is right. What the labour force survey reveals above all is that the hon. Member for Oldham, West (Mr. Meacher) has been fiddling the unemployment figures upwards for months.

Mr. Leighton: How many people are now doing more than one job? I understand that more than 1 million people have either two or three jobs and that they are counted in the figures two or three times.

Mr. Fowler: I do not have the full figures on that, but I shall seek to get them for the hon. Gentleman. However, I can tell the hon. Gentleman that the labour force survey shows that 60 per cent. of the growth in employment is accounted for by full-time work and that in the past 12 months 75 per cent. of new jobs created have been full-time.

Mr. Bill Walker: Does my right hon. Friend agree that the information coming from the labour force survey shows very clearly how much Scotland has benefited from the policies of this Government and indeed, that there are more people in work today? In particular, the growth in high technology, the new satellite industry, leisure, recreation and tourism shows that the Scottish economy is in good shape.

Mr. Fowler: Yes, indeed. There has also been a very substantial amount of inward investment into Scotland, and into other parts of this country, which has helped

create new jobs. It has been attracted into this country by the strength of the economy and the policies of this Government.

Competent Persons

Ms. Armstrong: To ask the Secretary of State for Employment whether he will meet the chair of the Health and Safety Commission to discuss the role of competent persons.

Mr. Nicholls: My right hon. Friend has no plans to do so. Many provisions in health and safety legislation require specified tasks to be carried out by competent persons. The Health and Safety Commission keeps these provisions under review. If the commission wishes to make proposals to my right hon. Friend which would affect the role of competent persons in any particular area, he will of course consider these proposals most carefully.

Ms. Armstrong: Will the Minister tell us who makes the judgment that someone has achieved the level of competence to be recognised as a competent person?

Mr. Nicholls: The reason why the concept of a competent person has been enshrined in our legislation for many years is that it puts the onus on the employer in those circumstances to ensure that the person is competent. I think that the hon. Lady will agree with me on reflection that to actually have a requirement of competency is often better than having a test of qualification. Whether somebody is competent is a matter of fact.

Mr. Hayward: Will my hon. Friend explain how he can meet and discuss anything with a chair, please?

Mr. Nicholls: I am tempted to follow my hon. Friend in thinking about that. Perhaps I misread the question; I thought it probably said "chairman".

Health and Safety Executive

Mr. Pike: To ask the Secretary of State for Employment whether he will make a statement on the Health and Safety Executive's budget provision for the next three years.

Mr. Cope: Gross provision for the Health and Safety Commission and Executive in the three years from 1 April last is £118·3 million, £125·9 million and £133·5 million, as shown in the public expenditure White Paper. The provision allows for real growth in the executive's activities in all three years, including an increase in the number of inspectors, and of inspections.

Mr. Pike: As the Government have also indicated that they will make additional funding available only in exceptional circumstances, will the Minister indicate, if the Government are committed to the Health and Safety Executives, whether a continuing rise in the accident rate would be one of the factors which would influence additional funds being made available?

Mr. Cope: As with all public expenditure, it is kept under review from year to year, but those are the figures for which the hon. Gentleman asked for this year and the next two years.

Mr. Charles Wardle: Will my right hon. Friend tell the House whether he expects the Heath and Safety Executive


to submit evidence to Lord Justice Taylor's inquiry into the Hillsborough disaster? Does the executive's statutory responsibility to inform the public about safety matters or its liaison function with local authorities have any bearing on safety measures at football grounds?

Mr. Cope: It is not part of the Heath and Safety Executive's direct responsibility under the Health and Safety at Work etc. Act or other legislation of that sort, but it is advising on safety measures and will continue to give such advice as is required both to the authorities in charge of the football grounds and to the inquiry.

Mr. Meacher: How can the Minister give such complacent answers about funding when his Department is continually extending the responsibilities of the Health and Safety Executive without providing any extra resources to implement them? How can he justify introducing the new and important Control of Substances Hazardous to Health Regulations this year without providing extra resources to enforce them? Is it not pure gesture politics to will the end but to refuse to will the means?

Mr. Cope: I have just said that we are increasing the resources and enabling the Heath and Safety Executive to increase its staff. The COSHH regulations are about much more than transport.

YTS

Mr. Franks: To ask the Secretary of State for Employment if he will make a statement on the numbers of YTS trainees who obtain employment within six months of completing their training.

Mr. Cope: A total of 82 per cent. of young people completing their YTS course obtain employment soon after.

Mr. Franks: That figure will be welcomed by all hon. Members, or at least by all Members who sit on the Conservative Benches. Is it not the case that the youth training scheme was, and still is, opposed by the Labour party? Is not the Government's record in stark contrast with the hollow words and crocodile tears of the Labour party?

Mr. Cope: The Labour party does not seem to be of one mind about YTS. Sometimes it supports it and sometimes the Labour party gets in its way. I thank my hon. Friend for his comments about the figures. In Barrow in Furness, 90·4 per cent. of young people who complete YTS obtain employment and that is even better than the national average.

Mr. Ashley: How many of these trainees are disabled? What has been their comparative success rate in taking up jobs' after six months training?

Mr. Cope: I cannot answer that without notice, but I will write to the right hon. Gentleman and give him the figures.

Mr. Wood: To ask the Secretary of State for Employment if he will make a statement on the number of young people currently undertaking training on YTS.

Mr. Cope: At the end of February 1989, 401,500 young people were recorded as in training on YTS.

Mr. Wood: Is my hon. Friend aware that YTS has made a major contribution in Stevenage to many young people's successful transition from school to work? Is my hon. Friend satisfied that the work in terms of the two year scheme is going well?

Mr. Cope: Yes. It has made a major contribution and it is improving the training record all the time.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Cohen: To ask the Prime Minister if she will list her official engagements for Tuesday 18 April.

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): I have been asked to reply.
This morning my right hon. Friend the Prime Minister addressed the conference on security and co-operation in Europe forum at the Queen Elizabeth II conference centre. This afternoon my right hon. Friend will attend the 150th anniversary of independence celebrations in Luxembourg.

Mr. Cohen: Was a computer error which indicated plenty of space on the terraces one of the contributory factors to the Hillsborough disaster? Would not computer failure at turnstiles checking ID cards repeat the conditions which led to those deaths? Is that not a powerful reason for the Government to withdraw their Football Spectators Bill, await the inquiry report and have a radical re-think with the emphasis on safety?

Mr. Wakeham: My right hon. Friend the Home Secretary said yesterday that it would be seemly to delay progress on the Football Spectators Bill for a short while in view of Saturday's tragedy at Hillsborough stadium. I do not wish to add to that statement and I think that we should allow a little time to elapse. However, the Government believe that the future of football in this country lies in a national membership scheme in designated grounds and now, it seems, in providing all-seated accommodation at major football grounds.

Mr. Amery: My right hon. Friend the Chancellor of the Exchequer is reported to have said that a European monetary union would lead to a European federation and a European Government. Will my right hon. Friend the Leader of the House remind my right hon. Friend the Chancellor that the countries of the British Commonwealth and empire operated a single currency for more than 30 years under the guidance of a single reserve bank—the Bank of England—without ever coming near to a federation? Will he remind him of the guidance given in an old hymn:
I do not care to see the distant scene
one step enough for me"?
Would he also remind him of the opportunities which we lost with regard to the coal and steel authority and the Messina conference through too pedantic an attachment to phraseology?

Mr. Wakeham: My right hon. Friend the Chancellor of the Exchequer will be grateful to my right hon. Friend for his words and his wisdom in these matters. However, I assure him that any recent announcement with regard to the Government about a united states of Europe is simply not on the agenda.

Mr. Hattersley: Having had 24 hours in which to appreciate the mood of the House and the country, are the Government now willing at least formally to suspend consideration of part 1 of the Football Spectators Bill until the Taylor inquiry has reported on the whole subject of safety at football grounds without the inhibition or pressure of concurrent parliamentary legislation?

Mr. Wakeham: The Third reading of the Football Spectators Bill in the House of Lords was fixed for 24 April. That has been postponed, and no new date has yet been arranged. The Bill is an enabling framework. The Government have already given a full commitment not to implement the membership scheme within that framework until satisfactory arrangements have been worked out. That commitment still stands and, obviously, now embraces the lessons to be learnt from this tragic event.

Mr. Hattersley: That answer is, I think, word for word, what the Home Secretary said yesterday and is equally lacking in meaning. May I put a wider point to the Leader of the House. Will the Government understand the advantages to the whole country of proceeding on this subject by co-operation rather than confrontation? Will the Leader of the House make it clear to the Prime Minister that, given goodwill on both sides, such co-operation is possible? It is absurd that this should become a party political matter. We do not want that to happen, and I do not think that the country wants it to happen.

Mr. Wakeham: Neither do the Government want it to happen, but if there is to be goodwill on both sides the hon. Gentleman had better listen to the replies that are given. I was not repeating what the Home Secretary said yesterday.

Mr. Butler: To ask the Prime Minister if she will list her official engagements for Tuesday 18 April.

Mr. Wakeham: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Butler: Will my right hon. Friend give a firm and clear commitment to retain the pound sterling, and not to trade it for some kind of European funny money?

Mr. Wakeham: My right hon. Friend the Chancellor of the Exchequer made clear yesterday the fundamental and far-reaching nature of the proposals in the Delors report. I can assure my hon. Friend that the proposals for a united states of Europe are simply not on the agenda. There can be no question of future treaty amendments along the lines of the Delors report. We cannot accept the transfer of sovereignty that that implies. What we should be doing is pressing ahead with completion of the single market by 1992—a major task, to which the United Kingdom is totally committed.

Mr. McAllion: I know that the Leader of the House will wish to join me in sending the sympathy of the entire House to the family and friends of the young Dundee girl who was killed by two Rottweiler dogs last Friday. The House cannot turn away from its clear responsibility to control and restrict the availability of licences for these and other powerful and potentially lethal dogs. Will the Leader of the House therefore consult his right hon. Friend the Home Secretary with a view to the initiation of an immediate review of the no-licence situation and the

early introduction of legislation to ensure that these killer dogs are removed from, and safety restored to the streets of this country?

Mr. Wakeham: I shall certainly consult the Home Secretary. I have read about the recent tragic incident in Scotland. There has long been legislation to control dangerous dogs, and remedies are available once it is clear that a particular dog is dangerous. The breeding of dogs for sale commercially is already controlled by legislation. We do not think it sensible to try to extend these controls to private individuals who wish to sell the offspring of pets. We are therefore not contemplating legislation to control a particular breed or type of dog. However, I shall refer the matter to my right hon. Friend.

Mr. Burns: To ask the Prime Minister if she will list her official engagements for Tuesday 18 April 1989.

Mr. Wakeham: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Burns: Will my right hon. Friend join me in congratulating Chelmsford borough council on its "operation eyesore" this week for cleaning up litter blackspots in the area? If my Control of Litter (Fines) Bill is unsuccessful, owing to the absence of parliamentary time, will the Government be prepared to bring in legislation to give all local authorities the power to impose on-the-spot litter fines? Could shops, fast-food outlets and banks be compelled to keep the pavements outside their premises litter-free?

Mr. Wakeham: I certainly congratulate the Chelmsford borough council on the steps that it is taking to combat litter. I hope to be in Chelmsford on Friday to have a look at it. Litter is everybody's problem, and we are all involved in finding solutions. Local authorities, in particular, have a valuable job to do. The Government are considering a variety of measures to back up litter abatement activities, including those provided for in my hon. Friend's Bill.

Mr. Ashdown: Can the right hon. Gentleman deny that 7·5 million people in Britain now drink water with excessive levels of lead, and 5 million people drink water with nitrate levels which exceed the European standards? Can he deny that Britain is liable to be brought before the European Court for those infringements? What action do the Government intend to take to ensure that we are not prosecuted for failing to provide safe water for the people of Britain?

Mr. Wakeham: I cannot confirm or deny the hon. Gentleman's figures, but I am glad to hear that he is supporting the steps that the Government are taking to improve the quality of water through the National Rivers Authority.

Mr. Rowe: Will my right hon. Friend pass on to his right hon. Friend the Prime Minister an invitation for her to visit Mid-Kent and other parts of Kent so that, with her considerable interest in the problems of the environment, she can see for herself the immense pressures to which that county is now subjected as a direct consequence of the success of her own policies?

Mr. Wakeham: My right hon. Friend the Prime Minister will enjoy a visit to Kent when she can make it, and I shall pass on the invitation.

Amazonia

Mr. Dalyell: To ask the Prime Minister pursuant to her reply of 21 March, Official Report, column 511, if she will make a statement on the further proposals to help Brazil in research into forestry regeneration and allied subjects; and what resources are being earmarked for the conservation of the Amazonian rain forest.

Mr. Wakeham: I have been asked to reply.
We have written to the Brazilian Government offering to finance further expert advice and research on the conservation and management of the Amazonian rain forests and on climate change. We have also offered more training in the United Kingdom in environmental disciplines. We have suggested sending soon to Brazil a team from the Overseas Development Administration to discuss those possibilities and any other proposals which the Brazilians may make.

Mr. Dalyell: At the top of their list of resource requirements, the Brazilians put the need for four large cargo and two personnel carrying helicopters. Can we help?

Mr. Wakeham: Assistance to the Environmental Protection Agency is one of the possibilities which I hope that the ODA team will be able to discuss when it visits Brazil, probably in May.

Mr. Jacques Arnold: Will my right hon. Friend ask the Prime Minister to make it clear to the Government of Brazil that there is no intention to internationalise the Amazon basin and that we respect their sovereignty, but, nevertheless, we expect the Brazilian Government to give a lead in conservation in that area and to make clear to the rest of the world the assistance that they require?

Mr. Wakeham: The Brazilian Government are well aware of their responsibilities. We are working closely with them and that is the best way to proceed.

Mr. Corbyn: Will the Leader of the House give an undertaking that the Government will in no way support the funding of projects in the Amazon rain forest which lead to the destruction of that forest by either the EEC, the World bank or the international monetary fund? Will he also accept that the serious problem of the destruction of rain forests in Amazonia and elsewhere is partly caused by the debt crisis, which imposes an economic system on those countries which forces them to destroy the rain forest and thus damage the environment for the rest of the world?

Mr. Wakeham: The Government are trying to assist in solving the problem and I am surprised that the hon. Gentleman should suggest otherwise.

Engagements

Mr. Favell: To ask the Prime Minister if she will list her official engagements for Tuesday 18 April.

Mr. Wakeham: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Favell: Does my right hon. Friend agree that, ahead of the Taylor inquiry, it is wrong to condemn the police for the Hillsborough disaster last Saturday? When I started going to Hillsborough football ground 40 years ago with my parents and my young brother and young sister, the crowd capacity was far greater than now, there were few policemen, fans were not segregated and people felt safe inside and outside the ground. In other words, if people only treated each other now as they did then, one policeman would not have been faced with the dreadful life and death decision that had to be made last Saturday and we may well have avoided the appalling loss of life.

Mr. Wakeham: My hon. Friend is exactly right. Why people died is a matter for the judicial inquiry to determine and it would be premature for me to comment now.

Mrs. Mahon: Will the Leader of the House advise home workers in my constituency, who have just had their wages halved by F. K. I. Babcock, how they can survive when they have to pay soaring interest rates and manage with inflation running at nearly 8 per cent.?

Mr. Wakeham: That is not a matter for me to answer at the Dispatch Box. If the hon. Lady wishes to write to me about it, I shall look into it.

Africa (Visit)

Sir Hugh Rossi: To ask the Prime Minister what representations she has received regarding her recent visit to Africa.

Mr. Wakeham: I have been asked to reply.
Since my right hon. Friend the Prime Minister's return from Africa, she has received numerous congratulations on the success of the visit.

Sir Hugh Rossi: Does my right hon. Friend agree that the Prime Minister is to be congratulated on the part that she was able to play in Namibia, and that the decision, endorsed by Cuba and Angola as well as South Africa, for the withdrawal of SWAPO forces fully vindicated her condemnation of their cynical contravention of the United Nations plan and the Geneva protocol, and their attempt to dominate elections down the barrel of a rifle?

Mr. Wakeham: My right hon. Friend is right. SWAPO's initial action caused tragic and unnecessary loss of life. But the UN plan has survived a severe test. What matters now is that the proposed cease-fire should he made to work and that preparations should resume for free and fair elections. We are doing everything possible to help. The House will welcome the role that our signallers are playing in manning the assembly points in northern Namibia.

Toyota Plant (Derbyshire)

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): With permission, Mr. Speaker, I would like to make a statement on a major new investment by the Toyota Motor Corporation.
The House will be aware that Toyota has been considering setting up a car plant in Europe and that the United Kingdom was the lead candidate as a location for the project.
I am pleased to be able to report that the company has now made a final decision to proceed with the project in the United Kingdom. The president of the company, Dr. Shoichiro Toyoda, and my right hon. and noble Friend are today signing a document setting out the heads of agreement reached between the company and the Government, copies of which will be placed in the Library of the House.
Toyota has chosen a 280-acre site at Burnaston near Derby. The project will be in two phases. In phase 1, after a short period of pilot production starting in December 1992, commercial production will begin in August 1993 and will rise gradually thereafter to the maximum capacity of 100,000 cars per year. When economic and commercial circumstances allow, the project will move into phase 2, in which capacity will be expanded to 200,000 cars per year. The plant will then employ some 3,000 people, and will involve a total investment of about £700 million.
The company has decided to proceed with the project without Government financial assistance, and it is its firm intention to achieve a local content level of 60 per cent. from the start of commercial production in August 1993 and an 80 per cent. level within a further two years.
Toyota's project was probably the largest mobile industrial investment still to be won and it represents a major vote of confidence in the United Kingdom. I have no doubt that it will make a significant contribution to the local economy in the area around Derby, to the United Kingdom economy and indeed to the European economy as a whole.
I am sure the whole House will join me in wishing Toyota every success with it.

Mr. Bryan Gould: Will the Chancellor accept that we welcome his statement and an investment which will mean valuable jobs and new economic capacity in the east midlands? Does he recognise that warm congratulations are due to all those, and especially to my colleagues in Derbyshire county council—[laughter.]—lwho have worked hard to secure this investment? For all those who laugh in such an ignorant fashion, will the right hon. Gentleman confirm that Derbyshire county council has agreed to put in £12 million of its own money but has been refused any increased capital allocation for this year? Is this not an example of a Labour county council being prepared to make an effort which the Government have refused to make?
Does he recognise that, welcome though this news is, we should not be blinded to its real significance? If it were really evidence of economic strength, should we not expect comparable investments to be made by British companies with British resources? Is it not now easier for industry, especially in the regions, to obtain investment from the far

east rather than from the south-east? Are we not now seeing the final stages of a process which has replaced an indigenous car industry with one which is owned and controlled from Detroit, Paris and now Tokyo?
What safeguards have been obtained about the meaning of local content? Will the right hon. Gentleman confirm that, for this purpose, "local content" means EEC content? Is there any guarantee that the Powertrain will be manufactured here and that design and research will be carried out in Britain? How soon does he expect our balance of trade in cars, at present in deficit to the tune of £4·7 billion, to return to balance?

Mr. Newton: I welcome the opening remarks of the hon. Member for Dagenham (Mr. Gould) and I am glad to note that he endorses the welcome that I and, I think, the whole House have given. A great deal of work has been done by all the local authorities involved, of varying political complexions and by the Department of Trade and Industry office in the east midlands, to secure this investment.
The hon. Gentleman's reference to Derbyshire's proposed investment must, I think, be related to reports that it has offered to invest £20 million from its pension fund in this firm. Whether that is accepted by the company is a matter for the company, but it is certainly not part of the project as it has been announced today, nor an essential ingredient of it.
If I heard the hon. Gentleman rightly, and his comment about the Government having refused help, I would make it absolutely clear that the company was well aware of the possibility of regional selective assistance, for example, in those parts of the country to which that applies, and specifically chose this location in Derbyshire, which is not an assisted area. To suggest that that is in any sense a refusal of Government assistance is an absolutely ridiculous and misleading proposition.
My answer to the hon. Gentleman's rather tendentious remarks about the replacement of an indigenous car industry is that import penetration of the British motor car market last year was almost exactly the same as in 1979. Between 1974 and 1979, it doubled. That was when the damage was done to the indigenous car industry, and we are now seeing some strengthening of it.
The hon. Gentleman asked about issues of local content. I confirm that local content means European Community content, as I am sure he understands. Toyota has made it clear that it intends to build up quite rapidly to the 80 per cent. figure which I mentioned. We hope that it will also decide to do research and development in this country, as Nissan has recently decided to do.

Mrs. Edwina Currie: Is my right hon. Friend aware that we in south Derbyshire are absolutely delighted and pledge to build at Burnaston a showplace factory of Europe? Will he agree that Toyota chose Great Britain in Europe because of the atmosphere of encouragement for investment and top quality business created by the Government, and that it chose Derbyshire in Britain because of the first-class site, the excellent work force and the full co-operation, which became apparent in recent months, between all concerned? It is inappropriate and cynical for any individual to try to claim the credit. All concerned deserve it, and we hope that that co-operation will continue.

Mr. Newton: I very much agree with my hon. Friend. It is a striking fact about the confidence of overseas investors in Britain as a good place to do business that within the past week three major international companies with world names have made decisions which amount to investment in this country of over £1 billion.

Mr. James Wallace: I welcome the announcement and join the Chancellor of the Duchy in wishing Toyota and the people of Derbyshire well in this project. What time scale did the right hon. Gentleman have in mind when he said that "economic and commercial circumstances allowing", the project will move on to phase two? Will he also dispel fears that Britain in many respects is becoming an Airfix model kit assembly line? What design and engineering content will there be for British designers and engineers? Will they be involved in further development work by the Toyota group?

Mr. Newton: I must resist, on the basis of our experience with other major motormanufacturers here, including, most notably in recent years, Nissan, the suggestion that what is involved here is in any sense just a screwdriver assembly plant. I have made it clear that, when commercial production begins, local content will start at 60 per cent. and rise within two years to 80 per cent., which is rather faster than the build-up that has taken place at Nissan, which is now around 70 per cent. The precise make-up of that will be for the company to decide, but its initial investment includes a press shop, a body shop, a paint shop, a final assembly shop and a plastic moulding shop. I am encouraged by the experience of Nissan to suggest that it will not be long before Toyota is undertaking investment in design and development here in the same way as Nissan has found worth while.

Sir Hal Miller: Does my right hon. Friend agree that there are two aspects of particular significance about this announcement? First, as the glum faces of Opposition Members testify, it is a tribute to our economic policy and the economic recovery of this country which is the place to make cars in Europe. Secondly, in the circumstances of the deficit—[Interruption.]

Mr. Speaker: Order. Sir Hal Miller.

Sir Hal Miller: In the circumstances of the deficit on the visible balance of trade, we should be grateful, in a situation where Ford and Vauxhall accounted for the total increase in imports into this country last year, to the Japanese for increasing the vehicle build in this country and remedying that situation.

Mr. Newton: Yes, indeed; I very much agree with the spirit of what my hon. Friend has said.

Mr. Tony Benn: Is it not a fact that the attraction to the company was that Derbyshire county council offered £12.5 million in infrastructure and support, against which no extra capital allocations of any kind are made available by the Department of the Environment, and that it has recommended the £20 million investment from the pension fund in accounting that has been attacked systematically by the Government as a very poor example of attitudes towards confidence? Having paid that tribute to the county council and its leadership, is it not also a tragedy that people in this country, particularly

unemployed people from the motor industry, should have to look to foreign investment instead of seeing the money put in to build up our domestic product?

Mr. Newton: I have already made the point in response to the hon. Member for Dagenham (Mr. Gould) that, on any reading of the statistics, the principal difficulties of the United Kingdom motor industry in respect of imports occurred during the period of the last Labour Administration. What is equally clear is that the decisions about overseas investment in this country, not just by Japanese companies but in the recent decision by Ford to spend about £700 million on an engine plant in south Wales and just yesterday the decision by Bosch to invest £100 million in south Wales, reflect a significant strengthening of the United Kingdom motor car production and components industries, directed towards the difficulties of a longer period of decline, especially during the 1970s.
On the first half of the question of the right hon. Member for Chesterfield (Mr. Benn), I commented on Derbyshire county council earlier. Of necessity, various local authorities will need to work with the company in relation to infrastructure and access, and in other ways. The details of that remain to be sorted out.

Mr. Greg Knight: Is this not good news for Derby, not least because the Toyota Motor Company has an excellent record of not closing any factory that it opens? Is it not also true that Derbyshire is now a far more attractive county for inward investment, following the Government's excellent decision to introduce a uniform business rate? That means that the days of high business rates, due to the high spending of irresponsible Left-wing county councils such as Derbyshire, are numbered.

Mr. Newton: Certainly, I understand that Derbyshire is the second highest rated shire county in the country. One of the facts that Toyota may have had in mind is the Government's policy to ensure that businesses will not be penalised in the way that they were in Derbyshire and elsewhere.

Mrs. Margaret Beckett: Does not this decision vindicate the way in which elected members and officers of the county council, city council and district council have worked together for the benefit of the people of Derbyshire? Is it not a pity that, with the exception of the hon. Member for Derbyshire, South (Mrs. Currie), that all-party pursuit of the interests of the people of Derbyshire has not been reflected by Conservative Members?

Mr. Newton: From what I heard, my hon. Friend the Member for Derbyshire, South also recognised that there had been a co-operative exercise between all the local authorities involved—quite apart from their political complexion—and central Government, particularly as represented by my Department's office in the east midlands. Everyone involved should be well satisfied with the outcome of that effort.

Mr. Phillip Oppenheim: Is it not the case that, if Toyota has been more successful than British car manufacturers, it is because it produces products that people want to buy? In the 1960s and 1970s, the British car industry was hamstrung by poor labour relations and management, and the unthought-out and irrational


reorganisation policies of successive Labour Governments? Is it not also true that the real reason that Toyota has come to Derbyshire is the excellence and skills of the local work force, combined with the new economic climate that makes manufacturing attractive in Britain? It is totally ludicrous for one county council, or county council leader, to muscle in and try to claim all the glory for what was a co-operative effort by the Government and a range of local authorities.

Mr. Newton: I agree with my hon. Friend that the fundamental reason for the decision of Toyota, and other overseas companies, to come here, is the dramatic improvement in the climate for doing business—including that of industrial relations—in this country. Without such a climate we certainly would not have received the flow of major new projects into this country.

Mr. Harry Barnes: Does the Minister recognise the professionalism and businesslike nature of the prospectus put forward by Derbyshire county council? The fact that it also runs a highly successful and professional pension fund means that money is available for investment, which will produce returns for the pension fund and make it viable. Will local suppliers have access to provisions in the area, or will the free market knock out some of the potential which exists in Derbyshire? Will the markets in the EEC be open to Toyota or will we be confronted by the problems that recently arose with Nissan in France? Will the east midlands line be electrified in order to transport the goods produced, through the Channel tunnel into the European market?

Mr. Newton: The subject of the hon. Gentleman's last question will be a matter for my right hon. Friend the Secretary of State for Transport, and I have no doubt that he will note it. On the question of local content and access to the European Community market, the understanding signed between my right hon. and noble Friend the Secretary of State for Trade and Industry and the company today specifically indicates the commitment of both Toyota and the Department to ensure that the project contributes to the development of long-term collaboration between Toyota and the local components and other supplying industries.
As for access to European markets, the hon. Gentleman will be aware that my right hon. and noble Friend made a statement yesterday about the outcome of our representations to the Commission on the import of Nissan cars into France. The Commissioner has just replied saying that he has now received a formal assurance from the French Government that Nissan cars manufactured here will be allowed to enter France independent of the level of car imports into France from Japan. Given that the local content arrangements are expected to be the same as Toyota, I see no reason why the outcome should be different.

Mr. Michael Grylls: Does my right hon. Friend agree that the news that he has announced this afternoon is a tremendous coup for Britain? Is it a great success for Britain to have landed the two biggest motor car firms for investment within the EEC, and it will give our component manufacturers and

many thousands of small firms a wonderful opportunity to bid for the business. That will provide employment and added wealth for this country. We should be welcoming it, not carping like Opposition Members.

Mr. Newton: Yes. It indeed seems likely that the spin-off effect on jobs in the components industry, and other related industries, will be at least as large as the employment directly generated by the Toyota factory. Over a period we may expect 3,000 or more jobs, apart from those in the plant itself, to be created as a result of this investment.

Mr. Roland Boyes: Does the Minister agree that part of Toyota's reason for deciding to come to Britain may have been that it noted that the highly skilled workers in the north-east were building a better version of the same model of car in Washington than is being built in Japan—which is recognised by people in Japan? As a result, Nissan has brought the European technology centre into Britain—and, I hope, into Washington—recognising that that will create 250 jobs for highly skilled designers and engineers in Britain. The Nissan development is creating up to 4,000 jobs for people who desperately need them, and is also giving pride to highly skilled engineers, far too many of whom are on the dole.

Mr. Newton: I am grateful to the hon. Gentleman. I think that he speaks for many people in the north-east in recognising the great value that Nissan has brought to the whole economy of the north-east, and the way in which decsions to invest, for example, in design and development have followed its experience of success in manufacturing here. That is why I am hopeful that the same will happen to Toyota.
I am also glad—and I am sure that I carry the hon. Gentleman with me—that the decision by Fujitsu, which I announced last week, to undertake a major investment, again in the north-east, also reflects the growing acknowledgement in Japan of the success of its companies here in Britain.

Mr. Peter Rost: Is it not remarkable that, whenever there is good news for Britain, confirming that the present Government's policies have made the United Kingdom the most attractive country in the Community for inward investment, all that we get from Opposition Members is whingeing, carping and sulking?

Mr. Newton: I do not know that I would have put it quite like that, but I think that the answer is yes.

Mr. Dennis Skinner: Has not the Japanese takeover more to do with the fact that the Japanese have an £80 billion balance of payments surplus, as opposed to the £15 billion deficit that we have in this country? Can the Minister give any guarantee that all car trade unions will be allowed to recruit? Will they have the right to strike?
Is the Minister aware that one of the reasons why the Japanese decided to come to south Derbyshire is probably that they misread the newspaper reports? When they read that "Currie had been sacked", they thought that she had gone for ever.

Mr. Newton: It will not surprise the hon. Gentleman to learn that the question of how to conduct its industrial relations is, in my view, for the company to decide. As for the first part of his question, we all know that the Japanese


economy is successful because of the success of many of its companies. That is why it is so encouraging that those companies are deciding to come here to do business.

Mr. Roger King: Is my right hon. Friend aware that our warm welcome for Toyota extends not only to the manufacturing sector—including the component industry scattered throughout the west midlands, where new opportunities arise—but to existing car manufacturers? Nothing stimulates success more than good competition.
Is my hon. Friend aware that, compared with the £700 million that Toyota will spend in the next few years, Rover Group will spend £1,000 million on new products and new factory capacity? We say to the people of Derbyshire, "We shall build a better car than you will, and everyone will benefit."

Mr. Newton: I am glad to note what my hon. Friend says and the confidence with which he says it. I shall pass on to hon. Members on the Opposition Front Bench his reminder that rising investment in United Kingdom motor car manufacture and components is by no means confined to firms in foreign ownership.

Mr. Jack Ashley: I do not begrudge the investment in Derbyshire, but when the Minister discusses investment with Toyota or any other company, what consideration does he give to cities such as Stoke-on-Trent which, on any sensible criteria, need Government assistance but are refused all Government assistance and therefore need encouragement through investment? How does the right hon. Gentleman propose to help those cities?

Mr. Newton: I hope that the right hon. Gentleman will take some encouragement from the fact that Toyota decided to go to Derbyshire without Government assistance, as I said in my statement.

Mr. John Redwood: Does the Minister agree that the excellence of Toyota systems is reflected in their accent on complete quality, training, speed of product throughput in the factory and total manufacturing concepts, including mass customisation? Those are all things from which British industry could benefit and learn, and that is another bonus for Toyota coming here.

Mr. Newton: Yes—and the effect on components suppliers in the United Kingdom in helping them to increase their competitiveness is an advantage throughout the United Kingdom motor industry and increases our chances of component exports.

Mr. Dafydd Wigley: While recognising the satisfaction of hon. Members representing constituencies in Derbyshire and the midlands, the House will recognise that we are tinged with a little disappointment that Wales missed out on the project because of the failure of the Secretary of State's blandishments to the company. Will the Chancellor of the Duchy recognise that, if a company such as Toyota, in making a major investment, can afford to ignore Government incentives, perhaps the Government are pitching conditions on selective financial assistance and other incentives too high to have any meaningful regional policy? Will the right hon. Gentleman examine the conditions that apply to such investments and ensure that a real regional policy is applied to such investments?

Mr. Newton: I simply draw the hon. Gentleman's attention to the help given recently to a variety of projects, including Fujitsu last week, Bosch, announced by my right hon. Friend the Secretary of State for Wales yesterday, and the Ford engine plant in south Wales to which I referred earlier. I think that we are doing pretty well on regional policy and I do not think that the hon. Gentleman, as a Welsh Member of Parliament, can complain about the share that Wales has.

Mr. Martin M. Brandon-Bravo: May I add a welcome from Nottinghamshire to the welcome from my hon. Friends representing Derbyshire for my right hon. Friend's statement and share their distaste at the sour grapes we have heard from Opposition Members? Will my right hon. Friend, his Department and related Government Departments look at one issue that may help the project become even more successful—the provision of a freight terminal at Toton on the borders of Nottinghamshire and Derbyshire? The site is tailormade for the project, but I understand there may be some planning problems. If my right hon. Friend can help us overcome those problems, he will have helped Nottinghamshire and Derbyshire to make the project even more successful than I know it will be.

Mr. Newton: I do not think my hon. Friend will expect me to venture into intervening off the cuff in a local planning problem, as he delicately describes it, but I shall certainly ensure that his remarks are drawn to the attention of my appropriate right hon. and hon. Friends.

Mr. Harry Ewing: I congratulate the Chancellor of the Duchy of Lancaster on his command of the pronunciation of the names of Japanese companies, which is obviously a result of so much practice. When does he think that he will come to the Dispatch Box to announce a major investment in Britain by a British company?

Mr. Newton: The hon. Gentleman cannot have been listening to what my hon. Friend the Member for Birmingham, Northfield (Mr. King) said a few minutes ago. I answered by saying that a significant amount of investment was being undertaken by companies of various national ownerships.

Mr. Nicholas Budgen: Is my right hon. Friend aware that this decision will be warmly welcomed in Wolverhampton, where there are many important accessory manufacturers? But does my right hon. Friend agree that the choice of site is a lesson to hon. Members of all parties—and even to one of his Cabinet colleagues—who argue that decisions about where manufacturing sites should go are decided wholly by the generosity of the taxpayer through regional grants and subsidies?

Mr. Newton: The point is that it is sensible to have, as we have—especially through regional selective assistance —a policy that enables us to take account of what is required to achieve given outcomes in particular cases. In the other cases to which I have adverted, where regional selective assistance was paid or offered, it was, in our judgment, necessary to secure the project. In this case it has, happily, proved not to be necessary and I welcome that.

Mr. Bob Cryer: The right hon. Gentleman has given the time scale for the development of local content in the production of the car. Has he a similar time scale for the development of jigging tool and design manufacture in this country?
The right hon. Gentleman acknowledges the lead achieved by Japanese manufacturing industry. Does he think that it is because Japan has invested massively in manufacturing industry and spends less than 1 per cent. of gross national product on defence, whereas we spend 5 per cent. and are pouring £11,000 million into Trident? Does he think that there is a serious and important lesson to be learned?

Mr. Newton: I am not in a position to prejudge the commercial decisions the company may take on the aspects to which the hon. Gentleman referred. It is asknowledged to be the case throughout the House that one of the difficulties of this country over many years was inadequate investment in this and other industries. Therefore, one of the most encouraging signs of the past few years has been the dramatic rise in investment, especially in manufacturing industry.

Mr. Nicholas Bennett: My right hon. Friend need have no fears that the people of Wales will begrudge a slice of inward investment to their fellow citizens in Derbyshire. Does my right hon. Friend agree that inward investment has come as a result of the Government's policy of low company taxation and good labour relations, and not purely as a result of regional investment programmes? Does my right hon. Friend also agree that the hon. Member for Bolsover (Mr. Skinner) might be more generous in his view of the single market in Europe than he has been in the past few years, and that he should welcome this positive encouragement for European investment?

Mr. Newton: Yes, I agree with everything that my hon. Friend has said.

Mr. Paul Flynn: One alternative favoured site was at Duffryn in my constituency, and another was in the constituency of my hon. Friend the Member for Newport, East (Mr. Hughes). In our disappointment, we want to congratulate Derby and offer our best wishes to Dr. Shoichiro Toyoda that he and his company will be happy and prosperous in Derby as many other Japanese companies are in Newport and Gwent. The significant point about the announcement today is that the overall level of unemployment for Newport is 9·1 per cent., whereas for Derby it is 7 per cent.
We are not seeing today a failure by Newport. It has great pulling power in attracting new jobs and will be brilliantly successful again in attracting new jobs. We shall miss these jobs because they are the missing piece of the jigsaw in the Newport economy—blue-collar work for male workers. It is a failure for regional policy.
There was another missing piece in the announcement. Have the engine plant and the plant for manufacturing gearboxes yet to be allocated to Derby or is it still possible that they will be allocated to Newport?

Mr. Newton: I do not think that I will add further to what I have said about Wales. The company is still considering plans for the engine plant. The Government, and I am sure all others involved, will do everything possible to encourage the company to locate that plant in

the United Kingdom. As I have said, our experience with Nissan suggests that we can be reasonably optimistic about that.

Mr. Andy Stewart: My right hon. Friend's statement today will be widely welcomed in the east midlands, and especially in my mining constituency of Sherwood. In view of the fact that the mining industry is running down its manpower and so that the company is successful in attracting the right type of employment, will my right hon. Friend ensure that the miners have ample facilities for retraining to take the opportunities that the company will make available?

Mr. Newton: I have no doubt that this company, like the others to which I have referred, will want to place heavy emphasis on the importance of training and will contribute to it. Training will be one of the things to which the local authorities will also be directing attention. I very much hope that the company will provide new job opportunities for those whose opportunities are unhappily shrinking in the mining industry.

Mr. George Foulkes: May I also assure the Minister that I join in congratulating Derbyshire on a welcome increase in its number of jobs? However, may I point out that we in Scotland have noticed that there has recently been new inward investment in the midlands, in the north-east and even in the south-east of England—and especially in Wales —whereas over the last few months we have noticed a lack of new inward investment in Scotland which, in my view, has been caused by the substantial disarray in Locate in Scotland which, in turn, has partly been caused by rumours that have appeared in many newspapers that the Minister's Department wants to dismantle Locate in Scotland? Will the Minister scotch—if the House will excuse that expression—those rumours and give an absolute assurance that his Department has no intention of cutting or dismantling Locate in Scotland in any way?

Mr. Newton: All of us concerned with these matters —myself, the Secretary of State for Scotland, the Secretary of State for Wales and the Secretary of State for Northern Ireland—are concerned to ensure that regional policy produces a spread of prosperity in all those places where it has not yet reached the level of the south-east. The precise mechanisms for achieving that are a matter in this case for the Secretary of State for Scotland.

Mr. Derek Conway: My right hon. Friend will recall that, although Shrewsbury is not an assisted area, our town was in the final four for this inward investment. While we clearly envy Derbyshire's success, we in no way begrudge it. I am sure that my right hon. Friend and the House will be interested to know that, despite the fact that that 250-acre site in Shrewsbury will not now be occupied by Toyota, there is still considerable interest in that site, not only from foreign investors, but from a considerable number of British investors. The Toyota deal is neither the first nor the last involving sizeable investment in our area. Does my right hon. Friend agree that that is a sign of the underlying strength of the economy and that it can be judged by foreign and British investment and not by the niggling sour faces of the Opposition?

Mr. Newton: Yes, indeed, I have noted and will draw to the attention of the people concerned with the Invest in Britain Bureau what my hon. Friend has said generally about his own location.

Mr. Tony Banks: Is it true, as the hon. Member for Derbyshire, South (Mrs. Currie) claimed in the Sunday newspapers, that she nagged Ministers into supporting Toyota's bid for the new factory? If that is so, would it not be better if we sent the hon. Member for Derbyshire, South, who has a bit of time on her hands these days, on a nagging tour of British industrialists so that they can start investing in British manufacturing industry?
Will the Minister tell me why, when there is still demand among domestic consumers for cars made in this country, our motor vehicle industry is being taken over more and more by foreign investors and foreign imports? Has it got something to do with the way in which the Government have continually sold out manufacturing industry since 1979?

Mr. Newton: I hesitate to weary the House by repeating the point that I made at the outset about the period in which import penetration into the British motor car market really grew, which was when the Administration that the hon. Gentleman supported were in office.
Having worked closely with my hon. Friend the Member for Derbyshire, South (Mrs. Currie) in another capacity for some time, I would never have accused her of nagging.

Mr. Tony Banks: She said it herself.

Mr. Newton: What I would simply say is that she is never backward in coming forward in the causes that she espouses.

Several Hon. Members: rose—

Mr. Speaker: Order. I will call the four hon. Members who have been rising regularly, and I ask them to make brief contributions. I call Mr. Wardle.

Mr. Charles Wardle: Is it not the case that the prospects for this excellent project will be greatly enhanced if Toyota can negotiate a single-union agreement? Is my right hon. Friend aware of the interest of Mr. Bill Jordan of the Amalgamated Engineering Union in that regard? In spite of the silence on this from the Opposition this afternoon, does my right hon. Friend agree that it would serve the trade union movement well to bear in mind and to learn from the lessons of the fiasco of Dundee a little while ago?

Mr. Newton: I agree with my hon. Friend's last observations, but, having said clearly to the hon. Member for Bolsover (Mr. Skinner) that the question of how to conduct its industrial relations is for the company, I must say the same to my hon. Friend.

Mr. Nicholas Baker: Will my right hon. Friend point out to the hon. Members for Newham, North-West (Mr. Banks) and for Bolsover (Mr. Skinner), who do not appear to understand, that this is not a takeover, but an extremely welcome inward investment? It is the result of successful negotiations conducted by my

right hon. Friend and the Secretary of State, who are to be congratulated. Does my right hon. Friend agree that the basic reasons for that success are the strength of the British economy, the industrial revolution that has been achieved and the access to the Continent through the Channel tunnel? Those are all achievements of this Government.

Mr. Newton: It is the clearest single message, not just from the announcement today, but from other recent announcements—not least in the past week—that this country has become the favoured location in Europe for investment by many overseas investors. That is a tribute to what the Government have achieved in the British economy.

Mr. Christopher Gill: My right hon. Friend has stated that the Toyota company was attracted to make this important investment in this country because of the dramatic improvement in the economic climate. An important feature of that improvement has been the reduction of our corporation taxes to among the lowest rates in the world. Does that not demonstrate the virtue of continuing to drive the rates of corporation taxes down, so that companies are left with more money of their own creation to spend on research and development, on training and on the all-important capital investment?

Mr. Newton: I certainly agree with my hon. Friend that the policies that the Government have pursued for industrial relations, both personal and business taxation and, indeed, national insurance, have made an important contribution to bringing about those decisions.

Mr. Michael Brown: As one whose constituency was also being considered for this project, I add my congratulations to Derbyshire on securing this investment. Is it not clear from what the hon. Member for Newham, North-West (Mr. Banks) said that the part played by my hon. Friend the Member for Derbyshire, South (Mrs. Currie) was not insignificant and that the House and her constituents should congratulate her on what she has done to pull all the parties together? Is not another conclusion that we can draw from my right hon. Friend's statement the fact that the case for regional financial assistance is now no longer necessary?

Mr. Newton: I am afraid that I do not quite go along with the latter, as I indicated in one or two of my earlier comments. My hon. Friend's remarks about my hon. Friend the Member for Derbyshire, South (Mrs. Currie) were characteristically generous. I am sure that she will have been characteristically pleased by his reference to her.

Mr. Speaker: Application under Standing Order No. 20.

Mr. Harry Ewing: On a point of order, Mr. Speaker.

Mr. Speaker: No, I shall take the Standing Order No. 20 application first.

Mr. Harry Ewing: On a point of order, Mr. Speaker, arising from the statement.

Mr. Speaker: That may be, but I shall take Standing Order No. 20 first.

British Coal Science Laboratory (Closure)

Mr. Peter Hardy: I beg to ask leave to move the Adjournment of the House, under standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the decision by British Coal to close the science laboratory at Wath upon Deanne.
The matter is urgent, because British Coal announced the decision to close this laboratory yesterday afternoon. It is serious, because the effect upon my constituency and the neighbouring areas will be severe. We have suffered a series of devastating economic blows in the past five years. Great effort is being made to secure employment and economic revival and the existence of this successful establishment serves as a most useful and valuable pointer to the fact that we can and must successfully accommodate high-tech development.
For British Coal to transfer the work of this laboratory to a locality that is further from the major coal-producing areas and where economic need is much less severe is regrettable. It will be a cause of some bitterness, because the decision will be seen as a brutal disregard of obligation by British Coal.
There is further anxiety, because much has been achieved at Wath regarding the identification of the origins of coal samples. That research, which is extremely effective in identifying cases of cheating in imported coal supplies, has not been properly admired in some of the quarters where it should have been.
Many of the scientists, who are highly qualified, now face either unemployment or the prospect of uprooting, changing their lives and ending the happy local contact which springs from their successful operations in south Yorkshire.
Last Monday, in Energy Question Time, the Under-Secretary of State for Energy, although he was, in part, most reassuring, made it clear that the responsibility for the decision rests entirely with British Coal.
I suggest that this matter is one which the House should consider immediately to allow deep anxiety or anger to be expressed. In that way, a view could be formed about this regrettable and serious decision.

Mr. Speaker: The hon. Member for Wentworth (Mr. Hardy) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the decision by British Coal to close the science laboratory at Wath upon Dearne.
I have listened with care to what the hon. Gentleman has said. As he knows, my sole duty when considering an application under Standing Order No. 20 is to decide whether it should be given priority over the business set down for today or for tomorrow. I regret that the matter that the hon. Gentleman has raised does not meet the requirements under the Standing Order and, therefore, I cannot submit his application to the House.

Point of Order

Mr. Harry Ewing: On a point of order, Mr. Speaker.
I apologise to you, Mr. Speaker, and to my hon. Friend the Member for Wentworth (Mr. Hardy) for interrupting his important Standing Order No. 20 application.
My point of order is simple, Mr. Speaker, and no doubt you will find it easy to deal with it. As you know, the rising sun is now playing an important part in British industry. In order not to offend our good friends in Japan and the Japanese Government could you refer to the House authorities the need for some structural changes to be made so that the rising sun is never again shut out of the Chamber by closing the blinds? I believe that that would be an appropriate step to take.

Mr. Speaker: If I interpret the rumours aright, when we have television—if we have television—the blinds will be permanently drawn. [HON. MEMBERS: "Oh."] I must not pre-empt what may be done.

Football Spectators (No 2)

Mr. Alan Meale: I beg to move,
That leave be given to bring in a Bill to establish a statutory liaison body for the sport of football, to include in its membership the various footballing authorities and their agencies, football league clubs, the Sports Council, football supporters' organisations and other necessary bodies and to make provision for changes in the organisation and function of the sport and for connected purposes.
The enormity of the tragedy which took place last Saturday at Sheffield's Hillsborough stadium—where many football fans either died or were seriously injured —still lies fresh in the hearts and minds of the British people. I take this opportunity to place on record again the thanks of all hon. Members particularly those who are members of the all-party parliamentary football committee, and to all those who helped the injured or the dying in their time of need or who are now helping in whatever way they can to comfort the living.
So that there may be no misunderstanding or speculation about the reason for this Bill, I place on record the fact that the right to introduce it on the Floor of the House was gained some considerable time ago under the rules which govern the acquisition of a ten-minute Bill opportunity in this House.
The Bill has the objective of establishing a statutory liaison body for the sport of football, with a membership which includes the football authorities, their agencies, league clubs, the Sports Council, football supporters' organisations, local authorities, and others. That body has been widely recognised in this House and elsewhere as an alternative to clause I of the Government's proposals to introduce legislation to establish a system of compulsory ID registration for football supporters.
A measure of the strength of the Bill's proposals is demonstrated by the fact that it has considerable cross-party support, including support from the Government Benches. The Bill is supported in name by all the officers of the all-party parliamentary football committee. The Bill is also supported by my hon. Friend the Member for Liverpool, Walton (Mr. Heifer), in whose constituency Anfield football ground is located, and by my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) in whose constituency the tragedy occurred on Saturday. It also contains the name of my right hon. Friend the Member for Birmingham, Small Heath (Mr.

Howell), who is regarded by many in this place and outside as the most respected Member of Parliament in terms of sporting authorities.
My colleagues and I are both mystified and saddened by the Government's decision yesterday to continue with the measures contained within section 1 of their Bill. We feel they are out of touch with the lessons of Sheffield, and the advice they have been given by nearly everyone in football. Further, I cannot personally understand the logic in proceeding with such legislation, particularly at this time. I also feel it is time for a rethink and a different approach to the needs of football—a view shared by almost everyone connected with the game.
I echo the view of my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) that any decision should be delayed until the findings of the independent inquiry into the Hillsborough tragedy and other related matters are available.
Because of these views, Mr. Speaker, and out of respect for the bereaved families and loved ones of those involved in the recent tragedy, I have decided to withdraw my Bill at this stage in the hope that the Government will see sense.

Mr. Speaker: Order. I am afraid the hon. Member cannot do that. If he looks at "Erskine May" on page 383 —I believe he has been so advised—he will see that he must proceed with this motion, having moved it.

Mr. Meale: In that case, without further ado, I formally move.

Question put and agreed to.

Bill ordered to be brought in by Mr. Alan Meale, M r. Denis Howell, Mr. Joseph Ashton, Mr. Jim Lester, Mr. Tom Pendry, Mr. Eric S. Heller, Mr. David Blunkett, Mr. Robert N. Wareing, Mr. Harry Barnes, Mr. Brian Wilson, Mr. Peter L. Pike and Mr. Don Dixon.

FOOTBALL SPECTATORS (NO. 2)

Mr. Alan Meale accordingly presented a Bill to establish a statutory liaison body for the sport of football, to include in its membership the various footballing authorities and their agencies, football league clubs, the Sports Council, football supporters' organisations and other necessary bodies and to make provision for changes in the organisation and function of the sport and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday and to be printed. [Bill 118.]

Opposition Day

[7111 ALLOTTED DAY] [FIRST PART]

National Health Service

Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Dr. David Owen: I beg to move,
That this House rejects the Government's White Paper on the National Health Service as the basis for legislation; notes the rejection and reservations expressed by the Royal College of General Practitioners, the Royal College of Nursing, the Royal College of Surgeons and the Royal College of Physicians through the Joint Consultants Committee, the British Medical Association, the health service unions and the Institute of Health Services Management; believes that practice budgets for general practitioners and self-managing hospitals will lead to financial restrictions being imposed on the doctors' right to prescribe medication and treatment for patients on the basis of what is clinically necessary, to the separation of general practitioners and hospital consultants irrevocably damaging the growing links between home and hospital care and reducing the quality of the overall service available to patients; urges the Government to conduct pilot studies and experiments in relation to these proposals before introducing legislation and thereby to leave time for extensive consultations with the medical and nursing professions which did not take place before the White Paper was published; and also demands that the Government announce that they will not further extend tax allowances for private health insurance or allow the cost of private medical and surgical treatment to be offset against tax since these measures would lead towards a two-tier system of health care.
The National Health Service is an issue which goes to the heart of the vast majority of the people of this country. This is therefore no ordinary debate and no ordinary subject. Ninety-five per cent. of the people of this country use their family practitioner services; in any one day, nearly two thirds of a million people consult their doctors. An issue as important as this must therefore concern all Members of this House. It is also, of course, important that more than a million people are employed by the National Health Service.
It is not new for Governments to be in conflict with the medical profession, but it is extremely rare for a Government to find themselves at odds with such a very large group of people concerned with the National Health Service. A White Paper was introduced at the start of this year without any consultation with any of the professional bodies in the National Health Service. That in itself is unique. It is thus not unduly surprising that there has been criticism—what is serious, however, is the level of the criticism.
The royal colleges, which speak for the profession not in terms of salaries but in terms of education and science and professional ethical standards, are not notorious for political criticism and most Governments have been able to find some support among the royal colleges when dealing with the National Health Service. On this occasion, however, all the royal colleges—including the Royal College of General Practitioners, the Royal College of Surgeons and the Royal College of Physicians through the joint consultants' committee—have criticised the proposals. Indeed, they have gone further and rejected

them as a basis for legislation for the future of the National Health Service. The British Medical Association and the Health Service unions have also criticised the proposals. The Health Service managers have also criticised them, although in somewhat muted terms.
Taken at face value, the Government's proposals are supposed to benefit patients, but all the patients' organisations have expressed serious concern about them. It is a matter of pride and pleasure to the Social Democratic party to have the first debate on the proposals, although no doubt it is but the first of many. Hon Members of all parties have been confronted in their constituencies with a level of criticism and concern about the Government's proposals which has led Conservative Members to be deeply worried about them. I should be surprised, although perhaps not too surprised, if Conservative Members were able to support the Government amendment to the motion. The Government seem incapable of realising the depth of opposition to their proposals.
I want first to consider the central objections to the proposals. I do not believe that the Government are proposing a genuine internal market. If they were, I should be more enthusiastic about them. Rightly or wrongly, inadvertently or otherwise, the Government have produced proposals for the commercialisation of health care in its entirety. They are not even privatising it—they are commercialising it. Furthermore, they are creating not an internal market, but an open market.
The criticism of the proposals which is heard from every lip is that they involve the fragmentation of health care. Over the decades during which the NHS has operated, an important aspect of the service has been the way in which general practitioners and hospital consultants have gradually come together to provide an integrated pattern of care from home to hospital and from hospital to home. Until the White Paper was produced, it appeared to be common ground among the political parties to support that process of integration of health care—of doctors involving nurses and nurses working in hospitals and in the community, integrating community care and hospital care as part of a continuum. Suddenly, however, without any consultation, the Government have produced proposals which separate hospital health care from family practitioner care.
The proposals refer to the "self-governing" hospital. The Government seem to be trying to incorporate in the Health Service the same principles as they have applied to schools. The terminology is similar, with references to "opting out", and the marketing arrangements are also similar. But a hospital cannot be regarded as a self-contained unit. Let us examine the parallel with schools. A comprehensive school caters for pupils aged from 11 to 16 and often to 18. The school knows what is coming through, so it can plan and project, but it is impossible for a hospital to do that. It is also extremely wasteful to consider acute hospitals as separate entities.
One of the most important developments recently has been the policy to use acute hospitals intensively and on occasions to transfer patients from acute hospitals to community hospitals as a halfway house before going home. The services provided in the home—meals on wheels, health visitors, practitioner nurses and community nurses—are also an important part of the continuum of care. If provision in those areas is insufficient, people have to stay longer in hospital. If there is high-quality care in the


community and at home, it is possible to have more day surgery—something that is increasing all the time—and shorter stays in hospital, thus cutting costs.
One of the absurdities of debates about the National Health Service that is all too often apparent in the House are the great boasts about the number of people treated in hospital. The number has increased significantly, of course, because we have been able to increase the throughput in hospitals and to shorten the time that patients spend there. That is highly desirable, but it adds to hospital costs and additional hospital personnel are needed.
It is essential to see the Health Service in the round, as a whole. This is where the fundamental flaw in the Government's proposals arises. They have us talking about the self-governing hospital, when what we should be talking about is the self-governing district health authority because it is the district health authority which provides the continuum of care. We talk about general practice budgets as though the budget of the general practitioner could be separated, as though it existed in isolation from hospital costs and social services costs. When in the past such distinctions have been proposed there has been sufficient flexibility in the Health Service to take account of them.
For example, some years ago it was decided that a cash limit should be placed on hospital prescribing—I remember this because I was actually prescribing in hospitals at the time—so instead of the epileptic clinic prescribing for three months for a person being seen on a three-month cycle, one prescribed for two or three days and shunted the rest of the bill off to the general practitioner. The patient did not mind tremendously, although the general practitioner objected slightly, and we overcame the problem simply by shuffling the hospital pharmacy budget on to the general practitioner. In reality, it cost the Health Service more because hospitals prescribed cheaper drugs bought in bulk, while general practitioners prescribed drugs from the local pharmacy.

Mr. John Redwood: The right hon. Gentleman is being rather negative. Can he tell us how his internal market would work? How is it possible to have an internal market without doctor choice as to consultants, without patient choice, and without some differentiation in style of hospital?

Dr. Owen: I will deal with that when I come to it in the course of my argument. I prefer to develop first the logical case that general practice costs cannot be separated from hospital costs and that hitherto there has been a thoroughly reputable movement to bring the two together, rather than to separate and fragment them.
To return to the analogy of pharmaceutical costs, if a limit is put on the family practitioner's budget as well as on the hospital budget, there will be no way out because there will be no flexibility. That is rightly seen by general practitioners as limiting their clinical freedom to choose the type of treatment that they think best for the individual patient, so if the Government insist on it they will be starting to challenge a very fundamental aspect of medical practice.
These ill-thought-out proposals come at a moment when a large part of the Health Service agrees that there is a need for medical audit. There is now not only a great deal of consent to medical audit within hospitals but a growing

recognition of a need for medical audit within general practice and of the need for the medical profession to be held accountable for the costs that it incurs. It is beginning to be recognised that one cannot have a narrow concept of medical freedom—freedom to prescribe exactly what one wants, and to treat exactly as one wants—because that works back. As there is an overall limit to the amount of money that any Government will put into the Health Service, one has to accept some restriction on one's freedom to treat all patients as ideally as one would wish.
Medical audit—the concept of being held accountable for costs—is accepted by the medical and nursing professions and there is a growing understanding of the techniques involved, so why have the Government brought in a blunderbuss in the form of the White Paper? Why do they seek to legislate for those proposals to be applied across the board without a pilot study for a practice budget or any real understanding of self-governing hospitals other than that gained from six experiments, which have wisely been undertaken, in resource management in hospitals?
It is important to remember that, in five out of six hospitals, those responsible for the experiment in resource management have all said that it is far too early to move to self-governing hospitals and that many more lessons need to be learned. They have asked that their hospitals should continue with the experiment and not be diverted by the question of self-governing hospitals. It is not surprising that those five hospitals—the exception is Guy's —which have pioneered new techniques and want to continue the experiment, and which are going with the trend of modern medicine and modern management, should be coming out in criticism of the Government's proposals. Those who manage the Health Service say that the Government's proposals are ill thought out, with consequences that are difficult to foresee, most of them deeply damaging to the NHS.
It is not as though that was always what the Government intended. The proposition for an internal market, which the hon. Member for Wokingham (Mr. Redwood) asked me to discuss, was put into the public domain by Professor Alan Enthoven of Stanford university more than six years ago. Those proposals were bitterly criticised, often by the Department itself, as impractical and undesirable.
It is well known that the Social Democratic party thought that there was considerable merit in the application of an internal market as proposed by Professor Enthoven, but he did not propose self-governing hospitals or general practice budgets—he suggested that district health authorities should be given far greater autonomy to manage the district health authority, free from regional control, and that there should be a modest market between the district health authorities, with some element of patient choice.
We argued then, as we argued today, that the first step towards an internal market is for patients to be given choice so that, faced with a long waiting list in a district health authority—as sadly happens all too frequently, particularly in elective surgery—they should have the right to go to another district health authority with a shorter waiting list, confident in the knowledge that the bill for that will not be taken up by the district health authority which has reduced its waiting list but by the district health authority whence the patients came. That gives an incentive to districts with shorter waiting lists to take


patients from other districts, and acts as a financial discipline on district health authorities with long waiting lists.
If a district health authority decides that it does not wish to build up its expertise or be self-sufficient in a particular speciality, it will be prepared to accept the cost, knowing what that cost will be. In such a system, the money really does follow the patient. The patient makes the choice, advised by the general practitioner who will need information about waiting lists in neighbouring district health authorities.
Not every patient can move. To put a young mother in a hospital 50 or 60 miles from her home creates a major social problem, quite apart from the considerable costs involved. Although that is the most effective way of dealing with the immediate problem of waiting lists, introducing a welcome measure of patient choice, to be realistic for poorer families it must be accompanied by generous help with the cost of going to hospital and of a minimum visiting programme. We already encounter that problem with perinatal care. Where there are not full facilities for dealing with the highly specialised treatment of prematurely born children, the mother and child have to be taken to a specialised unit. The family then faces very heavy costs for a period of six weeks or more with practically no financial support. That aspect must be dealt with.
Such a system, which is the true internal market that has been discussed for the last five years and criticised by the Department of Health, is now being thrown out of the window as being of no significance and we suddenly have a new proposal for self-governing hospitals. Where did the proposal come from? What great genius created it?
If, as is clear, the medical profession objects, as does the Royal College of Nursing, and if the Institute of Health Services Management foresees considerable problems, do the Government still intend to shunt the proposals through? Are we to have the Official Secrets Act all over again? Will Tory Members behave like Lobby fodder and vote for the proposals? There will be a test of that later today.
How can any Conservative genuinely vote for the Government amendment? Perhaps I should read it out to them. It seeks to leave out from 'House' to end and add
expresses full support for the proposals set out in the White Paper 'Working for Patients' and believes that these will lead to a Health Service that is more responsive to the needs of patients".
I hope that general practitioners in the constituencies of Conservative Members who vote for the amendment will ask a few questions tomorrow. If consultation is to mean anything, surely the Government could have phrased it better and said:
expresses the belief that this forms a reasonable basis on which to progress, in consultation with the medical profession".
We are already being told by the Minister of State that there are to be no Dr. Noes and no change in the proposals. We are told that they are to be pushed through. [Interruption.] The Minister has been widely reported as saying that there will be no Dr. Noes. If he did not say that, I am only too delighted.
The Government need to face the fact that there are serious problems in the Health Service. It has caused deep resentment in the Health Service that the White Paper did

not in any section address underfunding. By any standards, that must be one problem. I agree that the medical profession always wants more money. The Government cannot blame it for that. The teaching profession always wants more money, too. Everybody always wants more money. But it is a fact of life that in comparison with the service in almost any other industrial democratic nation, our National Health Service is asked to carry on with a lower percentage of GDP devoted to it.
The figure in this country is 6 per cent. The average for OECD countries is 7·5 per cent. In the United States the figure is 11 per cent., and in France and Germany it is 8 per cent. to 9 per cent. We are told that the White Paper is to bring about the most radical change in health services since the National Health Service Act 1946. Yet it does not even address financial under-investment. It is no wonder that people who work in the Health Service are asking themselves, "Can the Government really be serious about these proposals?"
Only a few days ago, Bassetlaw district health authority produced an interesting proposal. Instead of asking for its hospital to be part of a self-governing unit, it put in a detailed proposal to the Ministry that it should be allowed to form a National Health Service trust and that, within the National Health Service, the whole district—hospital and community care—should be allowed to be self-governing. It also proposed that the regional health authority should hold the budget and should be the accounting officer. The district health authority went to Price Waterhouse for an assessment of its capacity to do that.
That is the internal market that is really being suggested, and I believe that a pilot study should be conducted into it. Although I am deeply committed to the whole concept of an internal market, the SDP has always argued that it cannot be introduced overnight, that pilot studies must be carried out to prove that it can be done and that the information system on which the management of an internal market critically depends does not exist in the NHS at present. We have argued that it will take many years to develop to its true sophistication before we have an internal market, such as that which I suggested at district level, operating throughout the country. Despite that, however, the Government have introduced proposals for self-governing hospitals, which people do not want. The Government want 200 to 300 of them operating by 1992. What world are they living in? It is certainly not the world in which the majority of people using and operating the NHS live.
There are technical issues. The problem with the White Paper is that of an underlying dogma which is far more ominous. With the Finance Bill we are seeing the first step towards the more dogmatised, ideological basis of the Government's reforms—health insurance tax relief for those aged over 60. Many Conservative Members voted for that proposal, but I hope that before it is implemented, and later extended to the whole of the working population, they will think through the implications. Since the original Tory opposition to the 1948 legislation, it has been a Right-wing dream to have tax relief on health insurance.
One of the more amusing issues in recent months has been the criticism of the doctors. Department of Health Ministers have claimed that if the doctors had had their way originally there would not have been a National Health Service. They forget to mention that if the


Conservative party had had its way, there would not have been an NHS either because Tory Members of the day voted against the legislation.

Mr. Ray Whitney: How does the right hon. Gentleman explain the 1944 White Paper which set out the basic principles on which the NHS was founded? The Health Minister at the time was a Conservative.

Dr. Owen: Mr. Brown's White Paper, initially in 1943, followed by the actions of Henry Willink in 1944, was one of the best examples of a coalition Government that we have seen. The social legislation of the 1940s, on education, and so on—R. A. Butler's measure—was important, and if one cares to do so, one can go back in the history of the NHS to the Socialist Medical Association of the early 1930s. Even the British Medical Association had moved its position by the late 1930s. As with most radical changes, a considerable breadth of consensus was needed. It was surprising that when the original NHS Bill came forward from Aneurin Bevan, Sir Winston Churchill and the Tory party opposed it with great vigour. Fortunately, the Conservatives did not overturn the Act in 1951 when they were returned to office.
Since 1948, the NHS has had the unanimous support of all political parties in Britain and, by and large, that has been sustained across the transfers of Government. Now, however, the Government have introduced their White Paper, and there is no question but that if there were a further extension of tax relief for private health insurance covering the whole working population, we would inexorably be heading for a two-tier health service and the American system of health care. If that were buttressed by the demands, of which we hear and about which we read in the newspapers, for tax relief on the cost of private medical treatment or in respect of private surgical treatment—we gather that that is being demanded by some Conservative Back Benchers—the movement towards a two-tier system would be very rapid indeed.
Against that philosophical background, we must consider the other aspects of the White Paper. The Prime Minister is among the small percentage of the population who do not use the NHS. She seems genuinely to believe that if one can pay for private insurance, one almost has a moral obligation to opt out of the NHS, freeing resources for use elsewhere in the service. But the NHS is based on a different concept. It is based on the principle of "count everyone in"—that everyone has insurance cover, that the service is provided for the whole of the population and that nobody, rich or poor, need opt out. There are great advantages in a health care system in which rich and poor participate and all are treated the same, with the judgment being made on the basis of clinical need. We would be taking a major step if we encouraged people to feel that they had a moral obligation to opt out of health care purely and simply because they had enough money to pay for private health insurance.
Let us look at the Government's proposals for self-governing, autonomous hospitals. It is very nice perhaps for teaching hospitals to opt out, but one of the problems of the teaching hospitals, particularly in London, is that they are already opting out of some of their community health responsibilities. If the Minister were to tell us that a particular hospital specialised in orthopaedic work, such as hip replacement operations, and was doing virtually nothing else and that there was a

case for the hospital being autonomous and run as a self-managing unit, people would say that we ought to try it and would feel that such a move was not unreasonable, since the hospital was not providing a district service and was not part of the health care pattern. If the Government were to encourage that hospital or some other specialised hospital to opt out as an experiment, no one would get very upset about it. Our objection is to taking out the district general hospital—the very core of our intergrated health care—and managing and financing it separately.
Let us take another example. It is suggested that the hospital trusts should have different terms of employment. There is much to be said for a district health authority being the employing authority, having the freedom to employ and making its own contracts. Hospital consultants should have contracts not with the region but with the district health authority. The family practitioner committees should come under the district health authority. If one integrated the district with the family practitioner health service one would create what is, in American terms, a health maintenance organisation, and one would be much better able to achieve some of the benefits that the Government are trying to achieve with the general practitioners contract.
Many of the preventive health measures in the new GP's contract are beneficial to medicine and, operating within the concept of a district health authority, could be of great benefit. But in fact the GP practice is to be fragmented and regarded as a separate unit. That will not work, or, if it does work, it will damage the overall integrated health care pattern.
On top of this, we have been waiting for years for proposals on the community health services, but they have not yet been brought forward. How on earth is it possible to legislate for the National Health Service and to formulate views on the family practitioner service and on the hospital service without any idea how the Government intend to handle the community health service? Those concepts are not separate abstractions—they are closely integrated.
Let us take, for example, the question of joint funding which I introduced when I was Minister of Health. Its prime purpose was to bring the social services, hospital services and family practitioner services together, and to provide some money to grease the wheels for integration. How can one consider this White Paper in the absence of any provision for community health? I hope that in this debate the Government will listen to the views of their own Back Benchers—to whom they listen more readily, I fear, than to Opposition Members.

Mr. Stephen Day: Will they?

Dr. Owen: We must take a realistic view of these matters. I am sad about it. I should like to believe that every word that we spoke would be taken with the utmost seriousness in the Department of Health, but I suspect that four or five speeches of opposition from Conservative Back Benchers might have more impact on No. 10 Downing street, if not on the Department of Health.
This debate is our first real opportunity to flag tip that the basis of the White Paper will not provide legislation which will carry the Health Service workers with the Government or carry the country with the Government but will do grave damage to the National Health Service. The question is how to get the Government off the hook.
That is the issue that Conservative Back Benchers should be worrying about. Here there are some real possibilities that I should like to encourage the House to consider.
First, it would be much better to get the question of the GP contract out of the way as quickly as possible—"Give 'em the money, Barney" used to be the expression, or "Stuff their mouths with gold," as Aneurin Bevan put it. I admit that at one moment when we were in office and when it looked as though we had the hospital doctors, the junior hospital doctors and the general practitioners all opposed to us, we found a way of paying GPs for contraceptive advice. I felt that that was part of the contract of general practitioners and I was bitterly opposed to paying it, but I am afraid that I paid up, so it would not be the first or the last time that Governments have paid up.
That is not, however, what is necessary now because most of the criticisms of the GPs' contract can be overcome by a modification of some of the objections which are fairly soundly based. For example, the criticism made of the immunisation percentage is a real one, although I cannot for the life of me see why we do not put an obligation on parents, when their children enter school or when they claim child benefit, to show that they have participated in an immunisation programme. Making it all a responsibility of general practitioners is wrong. Parents have a responsibility to see that the immunisation programme is undertaken and it is part of the general practitioner's contract to see that it is done or done by the school health service.
Similarly with the cervical cancer smear service, the percentage figure is very high and people have reasonable objections to that. In dealing with the withdrawal of seniority payments, it is necessary to protect pension rights. Something can also be done about payment for night calls. It is not beyond the wit, certainly of the Secretary of State, if he sets his mind to it, to resolve these problems. He is obviously worried that if he makes a few concessions here the British Medical Association will come back asking for more and he will have to negotiate it.
Let the Government settle the issue of the contract in the next couple of months and then deal with the substantive problem, the National Health Service review. Having done that, let them get the GPs to accept medical audit to the extent that hospital consultants have accepted it. Let them extend resource management in the Health Service from the six hospitals that operate it now to 100 hospitals, and gradually build up an information system. Then let them conduct some experiments or pilot studies.
If, for example, a few hospitals are highly specialised and not part of the district health authority, let us have a look at running them autonomously. If there are a few people with large practices who are keen to run a practice budget, let them have a go at it. Legislation is not needed for any of that.

Mr. Day: That is exactly what is being said.

Dr. Owen: No, it is not exactly what is being said. The Government have been arguing for more than 200 hospitals to be operated as autonomous, self-governing units within a short period.
As regards practices, the Government are saying that it is up to the general practitioner—

Mr. Day: It is voluntary.

Dr. Owen: No, it is not voluntary. The Government have so changed the other arrangements for general practitioners that they are giving a considerable incentive to go for practice opt-outs. This is what the Royal College of General Practitioners and the General Medical Services Committee object to. If it were a free choice—

Mr. Day: It is.

Dr. Owen: It is not. Hon. Members must look at the proposals carefully and, I suggest, talk to a few of their local general practitioners. They will find that the criticism of the proposal is not that they are allowed to take an "opt out" decision for their own particular practice. What GPs object to is that the structuring of general practice payments and arrangements makes it difficult for them not to go in that direction. There is not just an incentive but a stick pushing them in that direction. That is what they object to, and they are quite right to object.
It is in any case not the right direction. The right direction is to integrate the family practitioner committees with the district health authority, and to try to produce a system of incentives that will encourage preventive medicine and health maintenance. In keeping down the costs of hospitalisation of a patient, the GP works with the consultant and both have an incentive to keep the patient in hospital for as short a time as possible. That saves money for the district health authority, and they all benefit in consequence. That is not fragmenting care—it is integrating care. It is getting cost-effectiveness through a much better provision of care by bringing hospital and home care together.
That is the direction in which the Secretary of State should proceed if he is wise. His problem is that overshadowing it all is the Prime Minister, who wishes to change the National Heath Service fundamentally. We should be under no illusions about this. The Prime Minister wants a two-tier health service, and she openly admits it in the House. She wants a system under which those who can pay private health insurance will do so. She thinks that it is quite right that the 40 per cent. of people who can afford to do so should operate within a broadly private health system. They would have a safety net so that if they were hit by a car on the M4 they would be taken to the local hospital. However, broadly speaking, the health care of such people will be taken outside the National Health Service.
For the other 60 per cent. of the population, the Prime Minister accepts that there should be a safety net and a health care system that is as good as can be afforded. Her Government would not spend too much money on that because it will be public sector money.
There is nothing new about such a system—it operated in this country in the 1920s and 1930s. It was rejected by the people when the National Health Service was created in 1948, and many of us are determined that it should not be reintroduced through either the front or the back door. Such a system underlies many of these proposals and it will be introduced unless they are rejected.

Sir Michael McNair-Wilson: Does the right hon. Gentleman think that consultants should opt to work in either the National Health Service or the private sector, or that the present position should continue?

Dr. Owen: I have reluctantly come to the conclusion over many years that we shall have to accept the Aneurin Bevan compromise in which doctors work in both the public and private health service, and we have a mixed provision of health care. Ideally, I should like doctors to work full time in the National Health Service, as I did. Had I stayed, I should always have worked full time in the NHS. However, we have to live with the system under which doctors cherish the right to practise privately part of the time. [HON. MEMBERS: "That is a two-tier system."] It is not a two-tier system at all. The private health care system that operates in this country is a small part of the overall health care system—a safety valve. It operates—and has done so under successive Governments—without serious detriment to the National Health Service.
If there was a serious attack on NHS waiting lists, they could be reduced, and then much of the motivation to expand the private sector would be withdrawn. There will always be some people who would like to have the freedom to choose their own doctor, but we cannot offer that choice to the whole population. It produces only a minor distortion of the system and, provided it operates at a fairly low level, it can be tolerated as part of the mixed health care system. However, that is not a two-tier system, or the one which we had before the National Health Service. Many of us are determined to ensure that it is not introduced.
Having listened to the debate I realise that a number of Conservative Members need to discuss these matters a bit more with some of their constituents if there are not to be many tears over the next few years. Nobody should underestimate the extent and depth of feeling against the proposals. The nursing profession is now almost more important than the medical profession to the successful running of the Health Service. There is a reasonable surplus of doctors, but there is an acute shortage of nurses, who have to be encouraged to return and stay in the Health Service. We cannot, therefore, dismiss the view of the nurses, let alone the views of the medical profession. Above all, we should not exclude the views of the patients.
The Government should be able to come forward with some level of support for their proposals from the people whom the proposals are meant to serve. If there is merit in them, it should be possible to point to patients who want them, but I have found no evidence of popular demand for any of the substantive proposals—which have been criticised—put forward in the White Paper.

Mr. Day: Does the right hon. Gentleman agree that while there is much feeling against the White Paper it is against the myths surrounding it rather than the actual proposals? The myths are largely created by organisations such as the British Medical Association.

Dr. Owen: The BMA is bound to be in conflict with the Ministers. I am reminded of the story of David Lloyd George, who went to the BMA when he was Chancellor of the Exchequer. When he came out of the meeting he said that he felt "like Daniel leaving the lion's den, the only difference being that those lions knew their anatomy." A mauling of Health Ministers by the British Medical Association is par for the course, but it is not par for the course for them to receive a mauling from the royal colleges of physicians, surgeons, general practitioners, obstetricians, gynaecologists and from the Royal College of Nursing. The degree of opposition that the White Paper

has roused within and without the National Health Service, and the total lack of support from patients, is not commonplace.
When Aneurin Bevan had trouble with the BMA, at least he had the patients on his side. It is clear from this debate that nobody—apart from Tory Members—seems prepared to vote for the Government's splendid amendment to the effect that everything in the garden is fine. Here is an opportunity for Conservative Members to abstain—to disappear quietly so that they are not here to vote for the Government's self-congratulatory amendment. In doing so, they may do themselves a great service. In voting with the Government they will be doing the Opposition a great service.

The Minister of State, Department of Health (Mr. David Mellor): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
`expresses full support for the proposals set out in the White Paper "Working for Patients" and believes that these will lead to a Health Service that is more responsive to the needs of patients, and will enable those hospitals which best meet the needs of patients to get the money to do so, will reduce waiting times, improve the quality of care, help family doctors to develop the services they provide for their patients, improve the effectiveness of National Health Service management, and ensure that all those concerned with delivering health care make the best use of the resources available to them.'.
I am glad that we have had the opportunity of debating this matter today. I wondered when an Opposition Supply day would be devoted to the topic. It is interesting that, whatever the Labour party may have to say about the White Paper, it has not been enthusiastic to table such a motion. Apart from the hon. Member for Peckham (Ms. Harman), who has to be here, there is only one other Labour Member in the Chamber. Admittedly, it is always a pleasure to hear from the hon. Member for Halifax (Mrs. Mahon) on these matters.
It may be that the Labour party lacks enthusiasm for a full-scale debate because it would not be long before its threadbare thinking on the need for positive change in the NHS would be revealed. Into that vacuum, in a rather unexpected way, has moved the right hon. Member for Plymouth, Devonport (Dr. Owen) and his motion. We heard a typically self-indulgent performance, expanding over 43 minutes, from the right hon. Member. Perhaps in future two-and-a-half-hour debates the right hon. Gentleman will use notes so that he might be able to deliver his speech a little quicker and more accurately. What he said was full of misconceptions about the White Paper.
One thing which could always be said of the right hon. Gentleman was that if he thought that the Government had a point—or even half a point—he was always prepared to acknowledge it. The interesting point about his contribution to this debate is the uneasy way—often resorting to making distinctions on the head of a pin—in which he seeks to distinguish between the Government's concept of an internal market in the NHS and the one that he claims to have popularised.
I suspect that the right hon. Gentleman—intoxicated, as his last remarks made clear by the thought that every man's hand was against the proposals, which is far from the case—has fallen into the trap of the lowest common denominator of Opposition. He would have done himself


a greater service if he had acknowledged that much of the thinking in the White Paper reflects a number of issues that obviously occurred to him when he wrote his book and when the SDP published its document.
The best I can find to say about the motion is that it could have been drafted by the Labour party. The right hon. Gentleman used not to be pleased to hear such words. However, he knows full well that, in his book, he makes it clear that he is interested in a more consumerist NHS, wants an internal market to be developed and a national health authority with substantial autonomy. He makes it clear that he wants improved resource management with measures to improve the cost awareness of professionals. He makes it clear that he understands the case for management of the NHS to be much freer and at a lower level.
It is astonishing that the right hon. Gentleman should base his objections to the Government's proposals on the distinction between self-governing hospitals and semi-independent district health authorities. Bassetlaw may well have snookered him by producing proposals at which we are looking with great interest.
The right hon. Gentleman knows full well that the concepts set out in the White Paper reflect an awareness at which everyone except members of the Labour party must surely arrive: if the NHS is to meet the challenge of the next decade it must be more cost-effective in its delivery of services. The "Green Paper"—presumably the right hon. Gentleman not only wrote it but cut down the trees to pulp the paper, given its one-man-band nature—states:
The SDP believes that the introduction of an internal market into the National Health Service would yield a number of benefits. Firstly, health managers would be able to use resources in a more effective manner. They would be free to buy services from other suppliers who offered good value, and by careful investment of their own resources attract income from other health authorities. The move to an internal market would provide an incentive to develop a more sophisticated financial management and information system. It would also provide a strong incentive to review existing methods of service delivery … Funding will in effect follow the patient, bringing an important transfer of power in favour of patients.
It is regrettable that the right hon. Gentleman has failed to accept that such notions—whether they embody his own concept of an internal market, which no doubt he would be bound to admit was less than fully argued through in his book and presented very sketchily today, or our kind of concept—start from a common root of recognition that unless the NHS becomes more consumerist and is managed more effectively lower down the scale—unless there is some freedom for finance to cross the arbitrary district boundaries that now inhibit the proper delivery of care—we shall not meet the challenge of the next decade. It is regrettable that the right hon. Gentleman has seen fit to kow-tow in this way, notably in the article that he produced in the Daily Express on Saturday. I do not know whether any other hon. Members have read it.
Although the article went on at some length, no one reading it would have dreamt for a moment that the right hon. Gentleman had ever thought about internal markets. Of course, it contained much good advice. It called my right hon. and learned Friend the Secretary of State "insouciant", and told him what wise heads would do—

which, in the light of the right hon. Gentleman's political career, is a bit like King Farouk telling people how to run a kingdom.

Mr. Nicholas Soames: Or Roy Jenkins.

Mr. Mellor: The right hon. Gentleman says:
when you are in a hole, stop digging.
Who better than he to formulate such advice?
The right hon. Gentleman knows only too well that when he was in office he was not deflected by opposition from groups that he considered to be standing up for more vested interests than for progress. He has conceded in most of his subsequent writings that what he proposed then was wrong. But the idea that the doctors, or indeed any other group within the NHS, should be the final arbiters of a change in what is actually the patients' service strikes me as a further retreat from the principle of which the right hon. Gentleman should be less than proud.
Let me make a positive case for the concepts in the review. I shall do so as briefly as possible, so that the maximum number of hon. Members will have an opportunity to speak—more than 40 minutes having been taken, quite unnecessarily in my respectful judgment, to open the debate.
The first crucial point is that the past 10 years have been years of expansion for the NHS, in which funding has increased considerably. Had we merely continued the level of funding that existed 10 years ago, this year the NHS would be spending just under £19 billion at 1989–90 prices. In fact, it will be spending more than £26 billion. We know that nearly 1·5 million more in-patients a year are being treated by the NHS than were treated 10 years ago, while 3·25 million more out-patients and 500,000 more day cases are being dealt with.
Those statistics are familiar; I need not go over them. However, the expansion of the NHS has not, in truth, made the service any easier to run in 1989 than it was in 1979. If we had dared to predict such expansion 10 years ago, people would have thought first that a tripling of cash expenditure within a decade was not possible, and secondly that if it were possible—imagining that signing a large cheque is the fundamental way of dealing with the NHS—we would be in an easier position. We are not. The job of balancing priorities will become more rather than less difficult in the years ahead.
The reason is clear: demand for the NHS is growing, and will continue to grow inexorably. That is partly for demographic reasons: we are an aging population, and, important and good though that is, it imposes large costs on the NHS. Secondly, the frontiers of medical science are being continually pushed forward, mostly into expensive, high-technology developments. Thirdly, people are no longer content, for instance, to wear a body support for a hernia or a surgical stocking for varicose veins; they require an operation. People's thresholds for seeking treatment are being constantly lowered, which is not unreasonable. The service is there and people want to use it.
Finally, people are no longer content for the NHS to be simply a service for sickness. They want it to be a service for health. They want more prevention techniques, and they want the full benefit of primary health care to go to those who think that they are healthy but who may not be, so that they can be screened for conditions that can be dealt with at an early stage. Such things are possible in this decade. They were not possible in the decade during which


the right hon. Gentleman had custody of the NHS, because he spent most of his time having to argue that the NHS could not be protected from funding problems.
I know that what I am saying is not palatable to the right hon. Gentleman, but I listened to most of his speech, and I feel that he could at least do me the courtesy of listening to mine. The right hon. Gentleman is not always alone in having a valuable contribution to make to a debate, and having started this one he should, I think, listen to what the rest of us have to say.
The right hon. Gentleman knows that in the current decade the 20 per cent. increase in the number of general practitioners, and the 50 per cent. increase in the number of support staff for them—including the doubling of practice nurse members—have made possible primary care teams that could not have been dreamt of in the 1970s. As a consequence a great gap has been opened between those who are providing that full range of services and those who are not.
The task of Government is not to sit back and say, "Chacun à son goût; let any doctor do what he chooses", but to try to ensure, through the contract and in other ways, that health care reaches high standards everywhere, and that the contract not only rewards effort but stimulates further effort. To my mind there is not too much difference between that kind of consumerist approach and that which, until it became politically expedient not to do so, the right hon. Gentleman supported.
The gravamen of the right hon. Gentleman's charge when the debate was announced was his hostility to the "commercialisation" of the NHS, whatever that may mean. But unless the NHS is prepared to use the techniques of cost-effectiveness that have been so successful elsewhere it will be incapable of meeting those demands, even within the rising budget that we all want. Let us take, for instance, competitive tendering. I do not know whether in his present mode the right hon. Gentleman would consider that commercialisation, but we have saved nearly £110 million simply by not accepting that the way in which things have always been done is the way in which they should be done in the future.
Interestingly, 85 per cent. of the contracts that were reconsidered went in-house, showing that there were savings to be made if only people could be bothered to try. All that £110 million has gone back into the service. To put it another way, the equivalent of one and a half Great Ormond street hospitals have been saved by the service tightening up on washing and cleaning costs.

Mrs. Alice Mahon: rose—

Mr. Mellor: If the hon. Lady does not mind I will not give way: I am trying to be quick.
The same is true of a range of other efficiency savings. Some £740 million has been allocated elsewhere in the system. A tighter view has been taken of prescribing. Most people now admit that all the fuss over the limited list was based on two entirely false premises—damage to patients and that savings would not be made. We said that £75 million a year would be saved, and £75 million has been saved for four years now. Some £300 million that was being spent on over-priced branded cough mixtures on prescription is now going into the "front end" of patient care.

Mr. Michael Latham: I hope that my hon. Friend will concede that at the end of the

consultation period the limited list was three times longer than it was at the beginning of the consultation period, because his predecessors listened to hon. Members on all sides of the House. I hope that he will assure the House that he will do the same in regard to the doctors' contracts.

Mr. Mellor: Another unfairness in the speech of the right hon. Member for Devonport was that he suggested, by distorting phrases ripped out of context from my speeches and those of my right hon. and learned Friend the Secretary of State for Health, that we were seeking to ram those changes willy-nilly down the throat of the profession. My right hon. and learned Friend the Secretary of State has made it clear that the Government have a duty to set the direction in which the service should go. The publication of the working papers, the intensive discussions that are taking place and the invitation to co-operate that lies at the heart of all our proposals are designed to work with the grain of the system.
Of course, as we receive representations, whether they are about details of the contract or suggest ways in which we can better apply the financial principles in the resources management initiative, their voices will be heard and we shall not hesitate to change our minds. That is what we have been saying throughout the process. I am glad to say that the media who first wanted to report war-war have belatedly become interested in jaw-jaw and are reporting passages from my speeches saying that the proposals were not tablets of stone. We are looking for a genuine dialogue and we are only too ready to alter course and change practical details if that is required. We have a duty to lay down the basic thrust of the proposals and to carry them forward because they are right.
The right hon. Gentleman's house was built on sand. He based his case on the fact that we were compelling GPs to have practice budgets and hospitals to become self-governing. But only general practices of a certain size are being invited to apply for practice budgets, and those who do not wish to do so do not have to. Pilot schemes are a practical way of testing whether budgeting will work. The practices concerned will open negotiations—and plenty of them are ready to do so—if the negotiations flourish they will accept the budget and if the negotiations are unsuccessful they will walk away. No one is being compelled to take a budget. If the system works it will grow, and if it does not, as I said on the radio, it will be consigned to history. What could be fairer than that?
The same applies to self-governing hospitals. Of course we are entitled to say that we hope that the majority of acute hospitals will follow up but it is entirely their choice and there is no shortage of interest. What is meant by self-governing hospitals? Far from the right hon. Gentleman's uncharacteristic sloppiness in suggesting that the proposal was carried across from the education reforms, we have never used the words "opting out". We are saying that in the interest of good Health Service management it should be reduced to the lowest level consistent with being able to develop the best patient care. Given the calibre of people interested in becoming involved in special health authorities in London, the attractions of self-governing hospitals with the politics removed—attracting the best people from the community and the best managers to deliver the best service—are clear.

Mr. Brian Wilson: In referring to opting out or self-governing hospitals, the Minister repeatedly said, "It is entirely their choice." To whom was he referring?

Mr. Mellor: The hon. Gentleman knows well that the White Paper makes it clear that it is for various interested groups to come forward with proposals, and for the Secretary of State to determine whether those proposals should be implemented. I have told the hon. Gentleman what the White Paper states on that.
The White Paper is based on concepts which every patient and everyone concerned with the NHS wants—quality, responsiveness and value for money. As the Institute of Health Services Management has made clear in regard to the present funding of the NHS hospital service, a good unit that gets through its list and carries out more operations than average, runs into financial difficulties nine or 10 months into the financial year, while a unit that coasts along and does not extend itself is funded on exactly the same basis for ever and a day and, of course, does not run into financial difficulties. With money following the patient, something that the right hon. Gentleman used to advocate—well might he hold his head in his hands—those units that are good are allowed to reach their proper level. Surely that is in the best interest of patients.
We want a more consumerist Health Service. We are beyond the point at which, after the great battle to establish the Health Service, it was possible for the profession or anyone else to say that the NHS was doing the public a favour simply by allowing people to pass through its portals. It was regarded as deeply radical by some general practitioners that there should be an appointments system, but now it is accepted. Why should hospitals not be the same? Why should patients turn up at 9.30 and be seen at 12.30? Why should the conditions for many out-patients be so disgraceful?

Mr. Simon Hughes: Because of the lack of funding.

Mr. Mellor: I have already mentioned the increase in funding. The problems to which I referred often relate to priorities and attitudes rather than money. The idea that everyone should be acquitted of any dereliction of duty by the parrot cries about funding is typical of how spurious NHS debates often become. We all know that it relates to attitudes. We all hope that when cash follows the patient, NHS patients will become as valuable commodities to the medical profession and others as private patients. That day is long overdue.
Finally, I turn to value for money. Given the demands on the Health Service in the next decade, unless we can deliver health care efficiently and effectively, we shall not meet the increased pace of demand. Sometimes the argument is satirised as if it is simply a matter of making cuts or signing a large cheque, but the argument is about providing a quality of care that meets the demands of patients. Even within an expanding budget it will be a struggle. Value for money—a good quality of care at a sensible cost—is the way forward.
We all know that there are hospitals capable of carrying out operations on a day care basis. I visited one in Burton where 50 per cent. of the operations were carried out on a day care basis. In many other parts of the country people are in-patients for two to three days. Conducting operations on a day care basis is not selling the patient

short. Most patients do not want to stay overnight in hospital and do so only because the present system demands it. Our proposals are based on straightforward concepts that have been carried through to beneficial effect elsewhere in the economy. The NHS must not become a mausoleum to outdated managerial practices. The NHS is in the forefront of medical advance and should be in the forefront of financial and other management if we are to have the NHS that we need.
It will be interesting to hear other speeches in the debate and to find out whether any other parts of the House are capable of yielding up positive proposals such as those in the White Paper. People should be concerned not merely to stir up easy points by suggesting that the profession is against one proposal and the public are worried about another, but to find some way of ensuring that we deliver health care more effectively. At the moment, only the Conservative party is rising to that very real challenge.

Ms. Harriet Harman: It is highly significant, and will be greeted with dismay by the public and the professions outside the House, that the Minister failed to address any of the very real concerns that have been raised about the White Paper. He did not address any of the concerns that were well articulated by the right hon. Member for Plymouth, Devonport (Dr. Owen).
When will the House have a full debate on the White Paper? While I welcome the opportunity provided by this brief debate to begin discussion on the White Paper, it is quite wrong that the country should be discussing the White Paper yet the House has not had the opportunity to have a full debate. It is particularly wrong because the Government are already progressing with their plans, and have even gone so far as to appoint finance managers to run hospitals which have yet to opt out under system which has yet to be debated in the House. I should have thought that the Secretary of State should come forward urgently to discuss those plans in the House. The House is the only place in which the Government are likely to hear any support for their proposals, largely thanks to the Government Whips.
It is in keeping with the way in which the review has been dealt with from the outset that we have not had a chance to debate it fully in the House. The review was not, of course, a response to public concern about the shortage of resources in the Health Service. The original idea of the review was to give Ministers a breathing space and to sweep the issue under the carpet. It gave Ministers something to say when, week by week, day after day, they had to respond at the Dispatch Box to the concerns about lengthening waiting lists and cancelled operations.
But away from public involvement and any professional advice, the review has unfortunately mutated into a monster which aims to inflict on us the same chaos and misery that the American health care system inflicts on the American people. If there had been any public or professional consultation during the review process, it is inconceivable that the Government could have come up with the commercialisation of the National Health Service.
There is a broad and deep consensus about the Health Service, which only the Government stand outside. People understand that the commercialisation of health care will drive down the quality of health services, drive up costs by saddling the Health Service with a monstrous bureaucracy


and undermine the doctor-patient relationship by putting a price tag on each patient's head. It is clear to everybody that the Government are interested not in a healthy patient, but only in a healthy bank balance.
Doctors', nurses' and health workers' unions have all warned that the White Paper proposals will cut down patient choice, not increase it, and will reduce our chance of developing preventative health services. The proposals will hit hardest those who need help the most—the chronically sick, the disabled and the elderly. The fact that the weight of public opinion is overwhelmingly against the proposals and that the weight of professional opinion is unanimously against them must be a grave disappointment to the Government, especially as they have invested a great deal of public money—more than £1·25 million —in a shameful attempt to mislead the public and health professionals about what the proposals constitute. I challenge the Minister to name even one reputable, independent organisation that knows anything about the issue which supports the proposals. There is none.

Sir Michael McNair-Wilson: Seven million pounds has been spent in opposing the White Paper. Does the hon. Lady think that the British Medical Association should use general practitioners' surgeries as a way of putting across its propaganda to the sick and the elderly?

Ms. Harman: It is for the British Medical Association to decide what it does with its members' money. What the Government do with taxpayers' money is a matter for all of us. It is a pity that the hon. Gentleman cannot tell the difference.
The Secretary of State and his Ministers have become angry about the fact that they have not been able to buy public or professional opinion, so they have resorted to smear tactics: they have said that the doctors are simply reaching for their wallets and that the nurses are merely a vested interest who must be overridden. The Government remain determined not to listen to argument, not to consider the evidence and not to respond to public concern. Nothing in the Minister's speech suggested that he has listened to the points made so strongly.
The evidence is clear: we need more resources in the Health Service. It seems that even that message has not got through to the Minister. We spend less per head on health care than most other European countries and only a little more than half what Americans spend for an inferior system.
The other important piece of evidence to which the Government do not want to listen is that competition actually drives down quality. When hospitals compete, they cut corners so that they can cut costs, and that increases the mortality rate. The fiercer the competition, the higher the mortality rate. Evidence of that has been established clearly in the United States, even when dealing with not-for-profit hospitals. I am not talking about profit driving down quality, but the fact that competition for patients results in a lowering of quality. That was reported in The New England Journal of Medicine.
Ironically, people were safer being treated in a small town where there was only one hospital than in a big city, where many hospitals were competing for patients, and therefore cutting costs and corners. Yet that is what the

Government's proposals for opted-out hospitals competing with each other will mean. Standards will be driven down and mortality rates will rise. The internal market would also drive up administrative costs.

Mrs. Mahon: Before my hon. Friend comes on to competition, will she agree that the competition introduced through the tendering of services has been damaging to the quality of the Health Service? Most of us regularly see headlines about that in our local press. I have here an article describing how food inspectors have told a local authority to clean up and to improve hygiene standards in the hospital in which I worked for 11 years. It was a very clean hospital until it was forced to accept the in-house tender, which cut domestic services in half and reduced the standard of hygiene, leading to a dangerous situation.

Ms. Harman: My hon. Friend's example is a testimony to the Government's obsession to cut the cost of public services and never mind the quality.
When the Secretary of State gave evidence to the Select Committee on Social Services and was asked about the effect of the internal market on administrative costs, it was extraordinary that he could say that he had no idea of what the extra administrative costs would be. He was unable to give even the roughest estimate. When one considers that he is going headlong into proposals which, by all other estimates, will have considerable expenditure implications, it is extraordinary that he has no estimates or pilot scheme.
Resources will be diverted from patient care in a veritable paper chase of bills and billing procedures. Bills will go from hospital to hospital, from district health authority, to hospital, from GP to community service and from GP to one district health authority or another. That is what happens in the United States already and it is a pity that we cannot learn from the experience there, instead of simply recreating the mistakes. If one has a hospital appointment there for 9.30 am, one often has to turn up at 6 am to complete three hours of paper work before being admitted to hospital, so complicated has the system become. It is no wonder the American administrative costs are about 20 per cent., whereas ours in the Health Service are far lower.
I hoped that the Minister would deal with a number of important points of criticism raised outside the House and by the right hon. Member for Plymouth, Devonport (Mr. Owen). First, there is the question of patient choice. At present, a GP can refer patients either within the district or outside it, and within or outside the region. We have a genuinely national Health Service in that respect. If we look at the figures for cross-boundary flow, we can see that we do not need an internal market to free up the system and to enable patients to cross district boundaries. They already have the freedom and cross boundaries as a routine matter. The only impediments to that cross-boundary flow are spending restrictions, which have led some major hospitals to say that they will not treat out of district patients. That is a resource problem, not a problem of the system.
Therefore, the Government are making a completely bogus offer when they say that they are offering us a White Paper so that patients can travel across district boundaries, because GPs already have the opportunity to refer their


patients to wherever they and the patient think that the treatment is best and most convenient for that individual patient.
Although the right hon. Member for Devonport talked about what he regarded as the internal market, I did not see anything of the market in what he was saying. He said that we should have freedom of cross-boundary flows, which we already have, and activity-based budgeting. I do not see anything wrong with that, but there is nothing of the market in it.
Under the White Paper, the freedom of GPs, together with their patients, to make the choice about where the patient will be treated, will disappear. Instead, the decision will be made on a block basis at the beginning of the year by managers, by people who have no contact at all with patients, let alone with the individual patient who is seeking treatment. The decision will be made to place the contract and spend the money where the service is cheapest, not where it is most convenient for the individual patient, not where the service or the treatment is best, let alone where the individual patient chooses. The decision will be made not in response to individual patients as at present—the decision now rests with the GP and the patient—but on the basis of contract negotiations at the beginning of the year.
A major problem with that is that managers do not have accurate measurements of outcome and quality. All they have are accurate measurements of costs. Therefore, a powerful incentive is being put into the system for managers to negotiate contracts on block bookings for patients where the service is cheapest, rather than where the service is best. At this stage, medical audit does not help us, because the science of medical audit is still underdeveloped in terms of giving indications of outcome and quality.
At the moment, the people who know most about the quality of service in different hospitals and the effectiveness of the treatment and its outcome are the GPs who see their patients coming back from hospitals, and the hospital doctors who see the patients in hospital. However, they will not be consulted. They will not be the ones to make the decision on each individual patient. That decision will be made by means of a block booking by managers who know everything about cost, but nothing about quality and outcome.
That is why it is a travesty to continue to say that the White Paper will extend choice. Choice will be taken away from the patient and the GP and given to managers. It is true that in one respect more choice will be given—more choice will be give to the managers. It will be they who will benefit from more choice; it will certainly not be the GP or the patient.
The Minister said that GPs will not be forced to hold their own budgets. However, they will be forced to do so if that is the only way in which they can save referral rights for themselves and their patients. That is the stick to which the right hon. Member for Devonport rightly referred. The only way in which GPs can keep choice for themselves and their patients is if they opt to hold their own budgets.
However, when GPs do opt to hold their own budgets, they will be going out of the frying pan into the fire. Although they will have the choice of where to refer their patients, when they consult a patient, they must think not

only about what the patient needs, but about what their practice's budget can afford. That is why GPs are, justifiably, so angry about the proposals and that is why the public are justifiably afraid.

Mr. Day: On what basis does the hon. Lady justify the implication that the budgets for such practices will be under-funded—because that is the implication of what she is saying?

Ms. Harman: At the moment, the proposals are that the region will decide on the budget for particular GPs. If the hon. Gentleman had read the working papers, as I have —I suspect from his question that he has not—he would have seen that they state that the region will not underwrite too high referral practices. It is clear that GP's budgets are part of an attempt—a blunt instrument—to hold down referral rates, not to make sure that referrals are appropriate when they are made and that when they are not made that, too, is an appropriate decision, because overall the Government want to see referral rates and spending on prescribing go down, irrespective of the effect on the quality of care and irrespective of the effect on the patient.
Having seen the effect that spending restrictions have had on hospitals, surely the effect that such restrictions would have on GPs is obvious to anybody. In the debate on the Health and Medicines Act 1988 it was clear that the Government wanted cash limits on GPs because they thought that GPs were spending too much money. Wherever one looks, the Government's true aims are self-evident.
The second point that I was disappointed that the Minister did not deal with was the question of the number of patients that each GP has. The trend, supported by successive Governments, has been to reduce the number of patients of each GP. There is good reason for that. The idea is to improve the quality of care; to be able to give each patient more time to make a better diagnosis; to discuss more deeply with their patients the treatment and effect; and to increase the opportunity for preventive work and screening. Increasing the capitation element of GPs' pay is a direct incentive for GPs to increase their number of patients. It is a direct disincentive and financial penalty for those GPs who want their patient list to reduce.
I turn now to the opting-out proposals. Again, the Minister tried to fudge this issue. Why does he not come clean and admit that it is the Secretary of State who will decide whether a hospital opts out? Indeed, it will not have been necessary for anybody at local level to have been interested in the proposals. A hospital can be selected by the region without consultation with anybody, and it can be offered up as a sacrifice to the Secretary of State. It is absolutely clear in the White Paper that the Secretary of State will decide and that the region will recommend. No account need be taken of the views of the community which depends on that hospital or those of the people who work in it.
The right hon. Member for Devonport was right in saying that, when a hospital opts out, it will become a self-interested institution. It will be dislocated from the community that it should be serving. It will not be possible to plan services when a whole load of competing institutions are all trying to keep their heads above water in a dog-eat-dog situation. That is the very opposite of the


integration of the services and the planning for future services which, hitherto, everybody agreed was so important.
The way in which the Government have gone about the process of trying to spur people into being in favour of opting out is disgraceful. There has been a mixture of threats and promises. To doctors who are desperately worried because of the years of under-funding, the Government have said, "If you're good boys and girls and if you're one of the first to opt out, we'll see you all right" —with a nudge and a wink. I advise those who are being cajoled in that fashion to be careful, because, although it might be part of the Government's plan to ensure that the first opters out survive and that they, the Government, have successful examples to hold before the public at the next general election, the Government do not plan to carry on like that. The Government will then cut those hospitals loose with their enormous debts of interest charges. Rather than a dash for freedom, opting out might end up as financial suicide.
The right hon. Member for Devonport said that it might be very nice for teaching hospitals to opt out. Well, it will not be very nice for teaching hospitals in London, because of the value of their sites and buildings. If, as the Government plan under the capital charges White Paper, St. Thomas's hospital had to pay interest charges on its sites, it would have to pay an extra £40 million a year. Guy's hospital, which is just a stone's throw down the river, would have to find an extra £27 million per year to service its huge interest charge. Therefore, those hospitals will have to compete for patients to bring in the resources to service their enormous capital debts. They will end up doing what the private sector does to make money—more and more cold surgery.
Therefore, the teaching base and the centre of excellence will be lost in a war of attrition between hospitals which are on sites of high value and are close together. At the end of the day, when one of them goes bust, the Government will say, "It's not our fault; it's the market. There must have been over-provision." I warn those in the teaching hospitals to be careful, because a trap is being laid. I believe that many of them understand that.
What the Government must explain most of all—what the Minister failed to mention—is the tax subsidy to commercial medicine. That is an extraordinary way to allocate public money. It is unfair, because it goes to only those who can afford private medical insurance or to those who can get someone else to take it out on their behalf. It will not go to those who have the greatest need. The point about private medical insurance is that it is about insurance and not about medicine. The insurance companies want to insure a healthy person who is unlikely to claim, not a sick person who is likely to claim.
Why should the Government subsidise private medicine? The Government appear to be in a lather of enthusiasm for private medicine, but they have no idea what is happening in the private sector. When I asked a series of questions about activity rates and bed occupancy in the private sector, the Government's answer was, "We haven't a clue." Therefore, my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) conducted a survey of the private sector, and we are grateful for its response.
The survey showed that the private sector has a lower bed occupancy and has higher administrative costs. It costs more to do operations and it is being increasingly

taken over by the Americans. Why are the Government pushing us towards a system where the well-off will get treatment that they do not need, because it is profitable for doctors, but poor sick people will not get the treatment they need, because they will not be able to get insurance?
No one believes that the National Health Service is perfect. Of course we need more emphasis on community services, a better complaints procedure, a better system for compensating for mistakes and a reorientation of management and of those who work in hospitals towards the people who are using those hospitals. We need to develop the as yet primitive science of measuring and comparing the quality and outcome of the service, to further integrate acute and community services and primary services; and we need more resources to get the waiting lists down. No one is saying that the National Health Service is perfect, but what everyone is saying, apart from the Government, is that it is the best possible base on which to build.
The Government are trying to browbeat everyone by saying—the Minister denied this today—"Whatever you think, we shall go ahead with these plans, so you might as well shut up and learn to live with them." I do not believe that. Public and professional opposition remains enormously important. Because the plans are unjust as well as unworkable, the aim of everyone with any sense is to be part of a campaign to ensure that those plans remain plans and are never put into practice.
When will we receive the Government's response to the Griffiths report? It was rumoured before Easter that it would be soon after Easter. However, when giving evidence to the Select Committee, the Secretary of State said that he did not know when it will be. It appears to have drifted off the political horizon altogether. It is more than a year since Griffiths reported. There has been a huge increase in public spending on private care. It has increased by more than 8,000 per cent. since the Government came to power. Many people have grave reservations about the appropriateness of the sort of care and the standards of care that are being provided at public expense in the private sector. When will the Government get their act together and take hold of the situation? Or will they simply let the situation drift and leave thousands of frail, disabled and vulnerable people in the lurch, as is happening now?

Dame Jill Knight: A fool has infinite capacity for self-deception and a knave has infinite capacity for deceiving others. Far be it for me to accuse the British Medical Association of being either of those things, but I cannot understand why it has chosen to misinform, to mislead and to misquote the Government's review to its own members and to the country. The BMA's version of "Working for Patients"—I have read it carefully several times—is a travesty both of the Government's report arid of the true situation. I shall not say what I think, but I shall say what is in the BMA's review and point out where it contrasts clearly with what is in the Government's plan.][n several places the BMA's review speak as though underfunding is normal. If the facts are repeated often enough everyone will believe them. The BMA speaks of the underfunding of the Health Service—we have heard


that again today—when we are pouring money into the Health Service like Croesus, Midas and the IMF all rolled into one.
We heard again from the hon. Member for Peckham (Ms. Harman) that tired old fable that more money is being spent on the continent than is being spent here. If we do not add the amount of money that people are spending on their own health and are not receiving from the taxpayer at all, one can happily come up with an answer like that, but it is not an accurate answer.
In fact, our expenditure and our plans for putting more money into the Health Service are following a far steeper graph than anywhere else on the continent. We are doing much more for health care. I am proud to mention that, and even to boast about it. I know that Opposition Members hate hearing this, but when we came into office expenditure was £7,000 million per annum and it is now more than £26,000 million per annum. That is a large sum in anyone's language—except the BMA, which does not even notice it. Despite that immense increase, all that the BMA talks about is underfunding. I sometimes wonder whether the BMA would consider any sum worth mentioning as even adequate.
In paragraph 2.4 of the document the BMA goes even further. It keeps up its reputation for frightening old ladies by saying that the Government's main proposals in the White Paper are to
reduce the level of public expenditure
for health care. I was horrified to read such an accusation. I searched the Government White Paper from cover to cover, from back to front, upside down and inside out, and there is not one word to indicate any such thing. It is a lie. Does it even make sense?

Mr. Alex Salmond: rose—

Dame Jill Knight: No, I shall not give way. I am trying not to be too long and I give notice that I shall not give way to anyone.
The BMA's version of "Working for Patients" says that doctors will run out of money to treat patients. That is utter nonsense. The BMA says that doctors will have to take on more patients than they can possibly cope with. That is absolute rubbish.

Mr. Allen McKay: It is true.

Dame Jill Knight: The hon. Gentleman might do the Government the courtesy of reading the White Paper, which says what the plans are. It is no use Opposition Members talking about what they would like it to say. They will have to read what it says. Conservative Members are not fools. Could anyone in his right mind imagine us doing anything to harm the National Health Service? [HON. MEMBERS: "Yes."] I am glad to have had that extraordinary reaction from Opposition Members—it shows that they do not know anything.

Mr. Brian Wilson: Will the hon. Lady give way?

Dame Jill Knight: No, the hon. Lady will not give way.
It would be sheer suicide for anyone in Government to destroy the Health Service. Apart from that, we care a

great deal about it and, as our efforts have shown, we have repeatedly given more and more money to it. That is how we shall continue.
The paper published by the BMA speaks of the
present uniform distribution of specialist services throughout the UK".
What "uniform distribution"? Where has the BMA been all this time? There is ample evidence of a wide variety of services up and down the country. Why does the BMA pretend otherwise? Why does it give us this rubbish about
present uniform distribution of specialist services"?
The Government are anxious to achieve such a uniform distribution of specialist services, which will be available to everyone. The Government are working towards that goal, not jettisoning it.
In paragraph 2.7 the BMA states:
Extreme pressure is being put on health service managers, consultants and other hospital staff to seek self governing status for hospitals
That is another lie. No pressure is being exerted on hospital managers or consultants. If the Government were exerting pressure, extreme or otherwise, why on earth would they include conditions? One cannot exert extreme pressure and then say, "but the conditions are this, that and the other." The White Paper makes it absolutely plain that there is no question of pressure being exerted. Hospitals will be able to choose what they want to do. If the Government intended to exert pressure, why does the White Paper say that hospitals must be interested in achieving self-government? One cannot have it both ways. The Government have made it plain that before any decision is made about self-government the option must be wanted by the particular hospital. That is not equivalent to forcing hospitals to adopt self-governing status.
There is no more pressure on hospitals to go independent than there is on general practitioners to become budget holders, as the BMA suggests. Recently a banner headline in a west midlands newspaper said proudly:
Birmingham family doctors will refuse to carry out the Government's plans
All along, the Government have made it perfectly clear that doctors are entirely free to decide whether they wish to become budget holders. The hon. Member for Peckham was wrong—there is no hidden pressure on doctors. That is not to say that their expenditure will not be monitored, and so it should be.
Some doctors prescribe 50 per cent. more drugs than others with exactly the same case load. Some doctors send 20 times more patients to hospital than others, again with the same case load. What is wrong with monitoring doctors and asking why a particular doctor sends so many more patients to hospital? I know of a young woman who was put on valium by her doctor and stayed on it for seven years without any medical examination at any time. She was simply given repeat prescriptions. [Interruption.] Opposition Members may not like what I am saying, but that is a ludicrous situation and it must be stopped. The Opposition clearly do not want to do anything about it. It is right to monitor the amounts of money spent by different doctors and the reasons for that expenditure. It would be thoroughly irresponsible of the Government not to try to get all practices to run as efficiently as the best ones. The best ones are extremely good, but I am appalled at what some of the bad ones do.
In this connection, I draw the attention of the House to a leaflet which has been distributed in Poole. A copy of it


was brought to the House by my hon. Friend the Member for Poole (Mr. Ward). Hon. Members should know that there is a skull and cross-bones at the top of the leaflet. I thought it had something to do with pirates, but dear me no—it is a health warning. It says:
The Government is about to force dangerous changes on the National Health Service. They are going to put strong financial pressure on family doctors to give you fewer medicines, give you cheaper medicines, cut down on your hospital tests, cut down on your hospital treatment"—
[HON. MEMBERS: "That is true."] If the Opposition believe there is a scintilla of truth in that, they are out of their tiny minds. It continues:
Dangerous illnesses will be discovered and treated too late. People will die.
That has been published by a profession which has already said that it will not agree to advertising. Yet it apparently agrees with handbills which contain lies being directed at sick, old and frightened people. That is monstrous, and it is all of a piece with the deplorable BMA document.
In one respect, my right hon. and learned Friend the Secretary of State has brought trouble on his own head and contributed to the misunderstandings. I was astonished by accusations in the BMA paper that the Government are "rushing through" far-reaching and complicated reforms. The reforms are far-reaching and complicated, but they are not being rushed through. We all know that we shall not see a Bill until November or December at the earliest.
I have tracked down the source of some doctors' concern about this. In the first of the working papers the Government say that they intend to complete discussions by May. The whole thrust of the BMA's Luddite paper is to put the worst possible interpretation on the proposals and to suggest that the Government are rushing them through. That is not true, of course, but I wish that those words had not been used in the working paper as they suggest a lack of consultation.
Consultations are taking place. I know of no hon. Friend who is not having meetings every week with doctors or consultants in his constituency. We want to hear everything and we want to listen—that is what I call consultation. There is no question of rushing anyone as we have plenty of time. The BMA's interpretation of the proposals suggests to its members that the BMA's interpretations are fact. The words "might", "maybe", "possible" and "perhaps" are used right through the document—in one paragraph there were four "coulds" and a "might". It is infinitely better to have statements of fact than interpretations of the worst possible kind.
Another part of the BMA paper expresses concern that family practitioner committees
might be filled by individuals with no experience of the primary health care services".
Why on earth would we be likely to appoint such people, especially as the paragraph directly opposite complains that the Government intend to appoint health authority members who
reflect 'the strength of skills and experience' that the member could bring to the work of the health authority".
The BMA cannot have it both ways, but by golly it certainly tries.
I will take on a fair and honest political battle any day of the week. What I deplore about the BMA's misleading attitude and actions is that it knows perfectly well what the Government are driving at. It even acknowledges in some parts of the document that those objectives are absolutely right. The BMA forgets itself several times in the

document and it says that the Government's objectives are right—[Interruption.] Opposition Members should be careful. They have obviously not noticed how much of the White Paper the BMA considers is a good idea. That is made plain in its document. That is in there, too.
The worst part of all this is that members of the BMA are obviously being encouraged to mislead and frighten their patients. Our reforms have nothing to do with privatising, starving or ending the Health Service; they are about strengthening, extending and financing—

Mr. Alistair Darling: Private practice.

Dame Jill Knight: I do not give a damn about private practice. What I do give a damn about is that people outside this place should have the freedom to spend their money in the way that they wish. If they want to spend their money on health care, what has that to do with the hon. Gentleman? Why should he poke his nose into the way they choose to spend their money? What we are interested in is that there should be the best possible Health Service for sick people who need it, whether they can afford to pay for it or not—and it is because those are the aims of the Government that they will succeed, come what may from the Opposition.

Mrs. Alice Mahon: I am happy to follow the hon. Member for Birmingham, Edgbaston (Dame Jill Knight), and I hope I can put her right on one or two things which are certainly not the case. Her interpretation of what the BMA says is not the same as mine.
This White Paper is not working in the interests of patients. Indeed, organisations working for the National Health Service have all told me that they are quite insulted by the title of the White Paper, in that it implies that they are not working for patients now. Nothing could be further from the truth, and many of these organisations have worked under a great deal of stress, thanks to Government policies over the last 10 years on the National Health Service.
This White Paper is not just another reorganisation, it is something quite different. My hon. Friend the Member for Peckham (Ms. Harman) said it has turned out to be a monster, and that is absolutely true. She has been to America and studied in detail the system there, so she knows what the effect of the White Paper will be on the future of the National Health Service. It is about ending the National Health Service as we know it. [HON. MEMBERS: "Rubbish."] Oh, yes it is. It does not address the real problems of the National Health Service: under-funding, waiting lists, and the disgraceful segregation of the elderly which has gone on over the last 10 years.
We have seen wholesale privatisation of the care of the elderly, something that hon. Members opposite should be deeply ashamed of. The White Paper does not address the lack of care for the mentally ill and mentally handicapped. In fact, the disgusting emphasis of the White Paper is on competition, markets, buying, selling, incentives and assets —dehumanising terms when talking about care, but certainly reflecting the Government's values.
What is missing from the White Paper is any notion of the National Health Service as we would like to see it, as it once was, and as it was envisaged by its founders: care and compassion, the alleviation of pain, and an end to


suffering, regardless of the ability to pay. Most of it is focused on ending the basic character of the National Health Service. It is an extremely obvious prelude to full privatisation after 1992, and we on the Opposition Benches are not fooled at all; should a Conservative Government be elected then, that is what we will get.
Looking at the detail of the White Paper, I am shocked by the absence of local control and planning, because the district health authorities will essentially disappear. Paragraph 3.20 of the White Paper virtually announces the end of district health authorities. As the acute hospitals become self-governing, we are told that it will be the responsibility of those placing contracts to monitor their performance in providing agreed services. That is absolute nonsense, because the reality is that most district health authorities will possibly go, and where one remains in existence, it will be seriously weakened, and no monitoring of any authority is built into the White Paper.
I have read all the discussion documents, and it is only the training of junior doctors which will be monitored by the royal colleges. There is talk of questionnaires and follow-up surveys, but it is misleading to talk about monitoring by health authorities, because they will be either extinct or seriously weakened.
As my hon. Friend the Member for Peckham said, the capital arrangements are quite dangerous for some hospitals which might be tempted to opt out. The claim in the Prime Minister's introduction that the National Health Service will be financed mainly by general taxation looks like a very flexible and unreliable commitment. The delegation of operational money and increasingly large capital schemes to trust hospitals will encourage opting out, despite the Minister saying it is not true. There really is an arm-twisting operation going on, with lots of carrots being dangled; offers of a great share of the new market in hips and hernias and the like are being made.
I put it to the Minister that these trusts may be called the National Health Service but that that will soon become meaningless; despite what the hon. Member for Edgbaston said in her passionate address, hospital services will be subject to jungle law, because the hospitals which compete less successfully will slowly but surely lose patients, funds, reputations and staff, and communities will lose their hospitals.
One cannot have a free-standing accident and emergency department. I asked the Prime Minister and the Minister of Health for an assurance that Calderdale area health authority will not lose its accident and emergency service, and I received wriggling and sleight-of-hand answers, which is the technique this Government use when they do not want to be frank. But, reading those answers, it is clear that there is no guarantee that Calderdale will retain its accident and emergency service and the health authority or hospital trust may have to buy that service from Bradford or Burnley, thus putting life and limb at risk.
We may have thought that the arrangements under which schools and housing might be permitted to opt out were bizarre and undemocratic, but if we consider paragraph 3.15 in the original document, which mentions that a group of staff or people from the local community might initiate the process or respond to any initiative taken by the Secretary of State to form a hospital trust, we realise

what a sham any democratic consultation about these hospitals is. Paragraph 3.19, which talks about adequate publicity for trust formation, really does not comply with any notion of consultation as we all understood it.
My district health authority is under the direction of a politically appointed chairman, a Government lackey, who does the bidding of the Government on every instruction to cut and has done for years, and a district manager, a redundant manager from British Steel, who was thrust upon us and has proved an unmitigated disaster for our local health services. Any of these people can say to the Secretary of State, "We want to opt out," and the Secretary of State himself, as I understand it, can say, "I believe you should opt out." There is absolutely no sense of fairness or democracy in that at all.
This is not their Health Service. What right has a redundant steel manager, who now manages our local health service—very badly, in my opinion—to say that he will move us on the road to privatisation? He has no right. I worked for the Health Service for 13 years and I have more right than he to take decisions about our local services. I at least put my blood, sweat and toil into the Health Service. I cared very much for it. The bizarre and quite undemocratic notion of opting out will meet great opposition. The public will perceive it as so unfair that it will be a non-starter.
The hon. Member for Edgbaston referred to the BMA and what she thought were its unfair objections to the White Paper. As a member of the National Union of Public Employees, I worked actively for the benefit of staff in the National Health Service for many years. I was also an auxiliary nurse in the NHS. I did not often find myself on the same side as the BMA. Mostly the BMA is on the Government's side, not on the side of the rest of us in political terms. However, there is nothing iffy about the objections voiced by the BMA in Halifax to the White Paper:
A large proportion of patients will not be able to travel to hospitals outside their locality. Many patients and their relatives cannot afford to pay for fares involved; they will certainly find it highly inconvenient.
For hospitals to provide a competitive 'quote' for any service, corners will be cut, for example, skimping on investigations or reducing in-patient times increasing the likelihood of problems for the patient.
If a patient has been investigated at one hospital, but the treatment is cheaper at another hospital, will the patient need to be transferred?
Many questions are raised about patient care. With regard to general practitioner services the Halifax division of the BMA states:
Concern was expressed that no pilot-study had been carried out, or is proposed, to see if the GP budget-holding is feasible.
It continues:
Reduction of the basic practice allowance is likely to cause fewer vacancies for women doctors, who commonly work less than full-time while they have a young family.
The proposed budget-holding GPs will have no incentive to screen patients as any pathology found might cost some of his/her budget. Patients on expensive treatments might find doctors reluctant to accept them because of the financial implications.
GP budget-holders will have difficulty controlling their budget because of the open-ended nature of GP services. GPs cannot refuse service to patients on financial grounds.
There are many more specific objections from the BMA.
The idea that GPs require a different structure to provide them with incentives to practise better medicine is abhorrent and insulting. The emphasis of the White Paper is clearly on finance instead of patient care.
Cash-limiting primary health care will be hugely disadvantageous to the people who really need help—the old and the chronically sick. Far from criticising the BMA, GPs, nurses, hospital workers, consultants and all the other decent organisations which have put patient care first and objected to the proposals, the Opposition applaud those people roundly and soundly.
The National Health Service is suffering from starvation caused by under-funding. If Conservative Members were not blind, they would see the headlines in the press about this. On 13 April, I read a headline which stated:
Patients are dying because Calderdale does not have its own specialist heart unit.
The report continued:
the inevitable delays mean that many die, according to a report by Bradford Cardiologists.
The report states that roughly 11 per cent. of people waiting for an operation die.
If the Government were really serious about doing something about the Health Service, they should address that obscenity. They should not be trying to restructure something which does not require restructuring. The White Paper has little if anything to do with organisation or restructuring. The Health Service has been kept going, while the Government have been bleeding it to death, by the motivation of individuals and the dedication of those who work for it.
The Guardian said that the White Paper has met
a wall of professional opposition
which begins
to look more impregnable day by day.
I believe that the opposition will grow. This is just the start. I welcome the debate and I believe that the White Paper will be defeated because it is about ending the National Health Service. The public have rumbled that.

Mr. Ray Whitney: This is a very sad day for what remains of the Social Democratic party. In its very short history it has had many sad days, but I believe that the contribution from the right hon. Member for Plymouth, Devonport (Dr. Owen) who sadly cannot be with us any longer, marked the nadir of that party's troubled life. Possibly that has something to do with the right hon. Gentleman's personal history. However, it is particuarly sad because when that party was formed many Conservative Members, without any temptation to join it, welcomed it because it might offer an alternative to the tired Socialism and faded Marxism of today's Labour party. We hoped that it would offer open minds and new ideas. However, today we heard a speech from one of the most closed minds on this issue. The speech was totally lacking in new ideas.
The right hon. Member for Devonport suffers from what across the Channel might be called a professional deformation. That is to say, as a professional medical man, he shares the short-sightedness which sadly seems to afflict so many professional medical people in this country. They seem to be wilfully ignorant of the standards and what is being achieved in other parts of the world. They are totally cocooned and complacent about what the National Health Service can or should offer. When they look overseas, they

choose only the worst of the American experience, and ignore the very impressive best. They also ignore the enormous gaps growing in many areas between the standards on the continent and the standards which we can offer here now, with the great impact of the resources which the Government have invested in health care over the past 10 years.
The hon. Member for Devonport also suffers from a personal sense of guilt. He attacked fiercely the fact that we now spend—I believe he said "only"—6 per cent. of our national GDP on health. He seemed very anxious to forget the fact that when he was a Minister with responsibility for health, we spent 4·8 per cent. of a very much smaller GDP. That takes a lot of living down for someone who had any responsibility for the Health Service.
The right hon. Member for Devonport also made great play about the present flurry from the medical profession, including the royal colleges. Although he admitted that such flurries had happened before, he suggested that they were happening now at absolutely unprecedented level. A short time ago, the presidents of the royal colleges and the deans of the medical faculties issued a statement which said:
The ills within the NHS are serious and by threatening standards threaten the health and well-being of the community. There is a real danger of standards deteriorating to a point from which recovery will be impossible within a foreseeable term.
That statement was issued by the presidents of the royal colleges and the deans of the faculties in October 1974, when the right hon. Member for Devonport was a Minister responsible for health. Therefore, he should understand that this is not a new problem. It is a problem that has been developing. Indeed, it has been developing during the past 10 years, despite the resources that we have provided. I will not rehearse our record yet again, but it is a proud record—a record of commitment to a comprehensive, universal Health Service.
But, clearly, more and more funding is not enough. On the Jimmy Young show about 12 months ago, the hon. Lady said:
We need perhaps another £200 million, and then the problems of the health service will all be over.
Since the hon. Lady said that, we have produced billion after billion after billion, and, of course, we still have the problems. We know why. My hon. Friend the Minister of State, Deparment of Health enumerated the problems: the aging of the population, technical innovations and their resource implications, and rising expectations and aspirations.
These are serious problems that have to be dealt with seriously, but they are not being dealt with at all by members of the Opposition parties. Those Members are applying closed minds, totally ignoring what we have done and the fact that, in addition to more funds, which are coming forward thanks to the strength of the economy, we need structural and organisational changes. It is monstrous that, after 40 years, including the period when the right hon. Member for Devonport had some say in these matters, the sensitivity for resource management in the National Health Service should be virtually non-existent.
Happily, in recent years, we have had the resource management initiatives, the Korner report, and one or two other things, but we have a long way to go. But we cannot go that way unless mechanisms are put in place, and that: is precisely what the reforms now proposed are intended to


do. The suggestion that this involves the break-up of the National Health Service is nonsense. What it involves is doctors, nurses and others concerned taking a much more concrete interest themselves in the disposal of the available resources.
The right hon. Gentleman did at least have the grace to recognise that resources are finite. I will not say that demand is infinite, but certainly it can never seriously be contained. It is much more sensible that judgments about the allocation of resources should be made not at the level of the Chief Secretary to the Treasury or the Secretary of State for Health, but, to the best possible extent, in the surgery by the general practitioner, by the professional who knows. It is the professional who has the greatest insight, the best judgment and the most experience. Likewise, he must be much better equipped to judge which hospital his patient should go to. This is the essence of the proposals, which will bring great benefits to the consumer —and I do insist that we are consumers and customers, not just patients.
One of the unfortunate features of the Health Service, great though it is in many respects, is that in too many areas patients are pushed around. They have to wait here and wait there. This is the wrong atmosphere. Consumerism is growing and developing in so many other areas of life. Indeed, the Social Democratic party would consider that it is in the van of consumerism—but not in respect of the sacred cow of health, because it lacks the political courage to tackle the problems, as, of course, do all the other parties opposite.
I urge my right hon. and hon. Friends on the Front Bench not to be discouraged by the extraordinary performance of the British Medical Association. They should take comfort from the fact that there are many historical precedents. Every time a Government in this country have sought to improve the National Health care system, they have been opposed by the medical professions and their organised bodies. Those people opposed Lloyd George's National Insurance Act 1911, until they discovered two years later that it benefited them. They were the only people who opposed the coalition White Paper put forward by Henry Willink, the Conservative Minister of Health in 1944. We all know that their opposition to the Aneurin Bevan proposals were silenced only when, as we have been reminded, their mouths were stuffed with gold. Most of us in this House remember their ferocious opposition to the 1984 selected list, which we all now know is a great success. In all those cases, after fierce opposition for a year or two, the medical profession came round. I hope that it will not take so long this time.

Mr. Simon Hughes: I welcome this debate, and I welcome the opportunity to speak specifically to one aspect of it, in my role as the Member of Parliament representing Guy's hospital, which is thought to be the hospital with the strongest desire to become a self-governing hospital trust. It may interest the House to know that, when it comes to a vote tonight, there is not one thing in the motion as tabled by the right hon. Member for Plymouth, Devonport (Dr. Owen) with which

my hon. and right hon. Friends and I do not agree. We shall therefore vote with the SDP and, as I understand it, the Labour party, at the end of this debate.
We shall be voting with the other Opposition parties because the people represented in those parties are the successors to those who supported the idea of the Health Service both in concept and in legislation, in the 1940s, when the Tories opposed it. We believe that the Tories' commitment then, which was noticeable by its absence, to the provision of a free Health Service—free at the point of delivery for all, without distinction—is matched by their lack of commitment now.
I would point out to the hon. Member for Birmingham, Edgbaston (Dame J. Knight) that the evidence for that is that there is not equal choice for all. This year, her Government have introduced tax incentives for people, if they are of pensionable age, to go to the private sector. Her Government have always allowed the private sector to benefit from training that is paid for out of the public purse. The reality is that, over and over again, it is the Tory Government who push towards the private sector people who would—given a fair choice—far rather remain in the public sector.

Dame Jill Knight: Will the hon. Gentleman give way?

Mr. Hughes: Not at the moment. If I have a moment later, I may give way.
Many of the people who may be contemplating going into self-governing hospitals as consultants are doing so not because they support the idea, but only, as the hon. Member for Peckham (Ms. Harman) said, because they believe that if they jump quickly, if they jump first, the Government will make sure that they are protected, whatever happens to the rest. They are doing so not out of conviction but out of concern for their self-preservation. That is a cynical—understandable, but cynical—way of justifying any argument that they support the Government's proposals.
It is not right to say, as the hon. Lady argued, that the Government are not encouraging people to move in the direction of being independent within the Health Service. The working paper on self-governing hospitals says:
The Government believes that self-governing hospitals will have a major role to play in improving services to patients. It will therefore encourage as many hospitals as are willing and able to do so to seek self-governing status as NHS hospital trusts. The Government aims to establish a substantial number of trusts with effect from April 1991.
There is no doubt that the Government will encourage, push and contrive to make sure that, if possible, there are at least some flagships sailing into the new sea of the private Health Service after the next election. Whether they succeed is yet to be determined.
I accept the argument of the hon. Member for Wycombe (Mr. Whitney) that in this sort of debate it is not necessarily best to pray in aid those who traditionally have been difficult to please when reform has been mooted for them and their profession. The BMA has argued against reforms in the past. Inevitably, it sees things from its professional point of view. I do not think that its members are necessarily the best people to cite as advocates for a case that one seeks to argue here. One has to argue from principle and from the point of view of the public at large.
I must tell those hon. Members who believe that the users of the Health Service will not represent the greatest patient difficulty that the enormous majority of them are strongly opposed to the Government's plans. They believe


not that there is just a scintilla of truth in leaflets such as that which the hon. Member for Birmingham, Edgbaston (Dame J. Knight) cited as coming from Poole, but that there is a flotilla of truth in the allegations and assertions made in such documents. They believe that the Health Service is not safe in the Government's hands.

Mr. Day: rose—

Mr. Hughes: I shall give way in a moment if I have time.
Those who usually look to Guy's hospital as their local district hospital have specific reasons for concern. Many aspects of the White Paper are worrying, but those which worry people in south-east London most are those which are likely to change the nature of Guy's hospital and its quality of care. Guy's is at the forefront of those reported to be interested in becoming a self-governing hospital trust. However, many at Guy's, from the most senior to the most junior, are resolutely opposed to opting out. Many have written expressing their views. Even those who have said that they support the idea, among whom are some on the management board, have many crucial questions about self-governing yet to be answered by the Government. The Government have not yet convinced Guy's—far from it.
Just like the other five hospitals which are part of the resource management initiative, all of which have opposed the ideas in the White Paper, Guy's hospital has also not come out in support because it is not yet satisfied that its specific questions and concerns have been answered, some of which have even been put forward by advocates of the White Paper, one of whom was an adviser to the Prime Minister on these matters.
There is no guarantee that the introduction of market forces as proposed will in anyway improve care. On the contrary, there is evidence that unprofitable patients will become unpopular patients. In my area, where more than 25 per cent. of the community are pensioners, the probability is that in the long term Guy's will not be able to look after them and they will have to go much further away.
An increasing number of constituents in an inner city are likely to be elderly. On my last visit to Guy's I asked what would happen when they are admitted and could not he returned to their homes after an operation or treatment because they could not cope on their own. I was shown a graph of the profits to be made from the hospitalisation of an old person. After the initial operation or intensive care, profits begin to tail away to little or nothing. In order to prevent an old person blocking a bed, the hospital might, after about 10 days, have to impose a surcharge on the district for keeping the district's elderly, non-earning patients in hospital. The district would not have catered for that surcharge because it would have gone to Guy's because it offered the cheapest contract available. Therefore, the district will not be able to keep in hospital an elderly patient who has had an operation, but will have to move the patient out or look for somewhere else for that patient to go.
It is right that hospital beds intended for acute purposes should not necessarily be used for long-term convalescence, but in a place such as north Southwark there is nowhere else to go for long-term convalescence. We do not have nursing homes or long-term geriatric care facilities. If the last refuge, a bed in the local district general hospital, which also happens to be a regional

national specialty, disappears, the Government will he saying to the elderly in a community such as that in south London and Southwark, "You must leave your community because we cannot pay for you here."
There is no profitable solution to the care of old people; there are only caring solutions or uncaring solutions. With the district health authority forced to enter contracts on the basis of what will be the most economical, there is no hope of the less profitable services being expanded. The only answer will be out-of-town homes where residents will be far away from friends and families, inaccessible to visitors, isolated and alone. Commercialisation always has losers and the losers are always the weakest and most vulunerable in our community.
But care of the elderly will not be the only area to suffer. Centralisation will be inevitable as one hospital becomes known for a certain specialty. District health authorities will be powerless to prevent the services that they want to purchase being discontinued at one hospital and will be forced to go elsewhere. It is a twisted sort of logic to think that choice can be widened simply by a provider becoming a purchaser.
Anyone who has visited their corner shop knows that it does not work by providing everything because market forces do not allow it to do so. The convenience of the consumer does not mean that every shop has every product for sale. It will be the patient who has to travel away from his or her home and who will not receive continuity of care from the same general practitioner and consultant who will suffer yet again. Patients may have to go to Walsall for eyes, Maidstone for hearts and Southampton for backs because of the contract that the district has entered into. Many doubts still centre on whether it will be profitable for a local hospital to give a comprehensive service. The reality is that it will not be, and comprehensive local care in one's local hospital will be a thing of the past.
What effects will the White Paper have on teaching? For Guy's to survive as a teaching hospital there needs to be a wide range of medical activity. What will happen if Guy's loses its core contract with the local health authority of Lewisham and north Southwark? In any year, market forces may determine that the contract goes somewhere else—to St. Thomas's, King's, Bart's, the London or elsewhere. Commercialisation will not provide the stable basis that is needed to give students a five or six-year medical degree course. What will happen to the future provision of skilled doctors if medical schools are struggling to provide adequate training in an uncertain environment? And will they spend a lot of money on training—an expensive commitment—which they will not easily be able to recoup?
Commercialisation means the end of a balanced service in other ways too. The good consultants will be bought by the hospitals that can afford them and other hospitals will become second class with second class staff. The test in 'the White Paper is what is cost-efficient, not what is best for care.
The White Paper speaks of consultants becoming more efficient managers. Nowhere does it speak of managers becoming more caring health providers. Everywhere profit will be the governing factor. The providers, the general practitioners and the health authorities, will not be able to rely on a consistently secure provision of services. The hospitals will not be able to rely on a consistently secure flow of patients. The patients will not be able to rely on


consistently secure provision of care. The Opposition are right to be deeply cynical in their belief that the Government are intent on replacing care with profit as the motivating factor in the Health Service. I hope that Conservative Members will join us in voting for the motion tonight.

Mrs. Gillian Shephard: It is noticeable that the debate has been distinguished yet again by the continued inability of Opposition Members to give the Government credit for the record amounts now being spent on the Health Service. The nurses had an enormous pay award of almost £1 billion during the year, with an extra £2 billion being spent in the current financial year and an extra £2·5 billion planned for next year. The Government should give themselves credit for that extra spending and for the fact that our attention is now directed at the way in which those enormous sums of money are to be spent. I am sorry to note that Opposition Members apparently have no notion of the inequalities in the levels of provision across the country which the White Paper seeks to put right.
I mention in particular the new arrangement for the resource allocation working party. The abolition of RAWP will be welcomed in many rural areas with a high population growth, and especially in East Anglia, where the chairman of the regional health authority has said that that single measure will help East Anglian patients more than anything else in the shorter term. We hope that that wil be implemented rapidly.
The White Paper also seeks to remedy the poor quality of information about costings and quality of care within the Health Service, a matter frequently highlighted by the Select Committee. That too will be greatly welcomed by all the professionals working in the Health Service as a way of measuring the quality and evenness of care across the country.
In rural areas, patients are not always satisfied with the standard of service that they get from their general practitioners. Financial incentives will be given to general practitioners on a new basis for rural populations, for caring for elderly people amd for caring for children under five. Those and a great number of other incentives will do a great deal to bring the standard of service enjoyed by rural patients up to the best standard provided by GPs for their urban counterparts.
It may be of interest to Opposition Members to note that rural patients can perceive advantages in some of the provisions of the White Paper. If the new contract and the provisions of the White Paper can do anything to improve the attitude towards patients of a general practitioner who says that he does not need an appointments system because village people like talking to one another all morning, it will certainly have been worth while.

Mrs. Rosie Barnes: The debate has been set against a necessary Government review of the Health Service. The SDP has always welcomed the review. We were looking for a radical and imaginative overhaul of a system that has served us well for the last 40 years and that we want to serve us well for the next 40 years. We share

many of the Government's objectives—at least the ones to which they pay lip service. We welcome an increase in patient choice, better rights for patients and a more consumer-related service. The SDP has long been committed to the internal market, but not necessarily the internal market that we see in the White Paper. We also welcome a better quality of service across the board, and structural and organisational changes.
The White Paper sets the wrong agenda. There is nothing on funding. In spite of the many protestations from the Government Benches, without proper funding for the Health Service, no amount of juggling or reorganisation will make it work. The Health Service is under-funded compared with our comparable European competitors. It has to receive a substantial influx of funds to make any subsequent reorganisation and restructuring work.
Also incorporated in the White Paper and in some of the Government's recent thinking is an erosion of the basic principles of free service at the point of use, funded entirely out of direct taxation. There are major gaps in what we have seen so far. There is no acknowledgment of the growing need of the elderly and no proposal to take account of how a Health Service that is already straining under pressure can cope with the increasing number of elderly in our midst.
One of the things that troubles me most about the review is the speed with which it is being implemented. Again, we have heard from the Government Benches that it is a leisurely process. I could not disagree more. We are looking at a radical review which is demanding new skills, new structures and new procedures. There are dangers in what will happen. We have heard the words "might", "may" and "possibly"—the changes might or may possibly have disastrous effects on the Health Service. One way to make sure that they do not is to pilot schemes and see how they work. The Government should proceed slowly, cautiously and carefully on the basis of proper information.
I have a document from a leading city management consultant which addresses some of the problems. It deals with what regional health authorities, district health authorities and general practitioners will have to do. It is an extensive list. Due to lack of time, I shall read only a few of the items that it lists in relation to district health authorities:
establishing the likelihood of hospitals becoming self-governing;
specifying the volume and standards of service which will be required to meet local health needs;
setting up and evaluating contracts for both `core' and other services;
establishing tight contractual arrangements within minimum and maximum service levels for the full range of services required by the DHA's population;
establishing financial management systems which monitor contract expenditure and activity;
establishing mechanisms by which quality of contract performance is monitored, and ensuring all providers have comprehensive quality assurance and medical audit programmes".
The list goes on and on. It is a complex list of serious things that need to be done properly in order to get the service right.
We have before us not only an impossible time scale but a programme that is being implemented without proper consultation and without the good will and support of the


innumerable tiers of staff who have to carry out the procedure. The White Paper has provoked at best quiet resentment and at worst open hostility.
Severe and major strategic changes, which should be implemented sequentiously, are proposed. We should ensure that the cost and quality information is available well in advance of the procedure starting. There is no point in saying that we will go ahead on the basis of incomplete or incompetent information and, if we get it wrong, so be it. We are dealing with people's lives and with a Health Service that has been built up over the years. I agree with some Government Back Benchers that the current debate is taking place against a background of many successes that have often been overlooked while we focused on the failures.
The time scale for the review should be five to 10 years. We should move slowly and surely to get it right. There is a need to develop business plans and to acquire and use marketing and contractual skills. There is also a need for capital accounting. The whole procedure will need new skills. For all that to be done within two and half years is nothing more than a joke.
I support the resource management initiative, clinical audit and the use of information technology, but the way it is all being picked out of a hat and offered to the Health Service as a panacea for all evils makes the whole process unrealistic when the people, the resources and the structures are not there. Information technologists are an expensive breed. Many hon. Members will have spoken to hospital technicians who can all double or even treble their salaries overnight outside the Health Service. This scheme will rely on those self-same experts being in the Health Service, with no extra resources to pay for them. It just cannot work.
I prefer to speak in terms of patients' rights when considering the internal market. The SDP's version of the internal market was triggered by patients. It was based on offering patients a choice of a faster service in another hospital or in another health authority. But it would be up to them to make the choice. Because it was a choice, it was a carrot rather than a stick. It was not a cheap option, it was not punitive and it was not a cost-cutting exercise. The review will have disastrous consequences for the NHS.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 77, Noes 230.

Division No. 161]
[6.59 pm


AYES


Archer, Rt Hon Peter
Fields, Terry (L'pool B G'n)


Barnes, Harry (Derbyshire NE)
Fisher, Mark


Beckett, Margaret
Flannery, Martin


Beith, A. J.
Godman, Dr Norman A.


Boateng, Paul
Golding, Mrs Llin


Boyes, Roland
Gordon, Mildred


Campbell, Menzies (Fife NE)
Harman, Ms Harriet


Campbell-Savours, D. N.
Haynes, Frank


Carlile, Alex (Mont'g)
Heffer, Eric S.


Clark, Dr David (S Shields)
Howarth, George (Knowsley N)


Clay, Bob
Howell, Rt Hon D. (S'heath)


Clwyd, Mrs Ann
Howells, Geraint


Corbett, Robin
Hughes, John (Coventry NE)


Cryer, Bob
Hughes, Simon (Southwark)


Dalyell, Tam
Johnston, Sir Russell


Davies, Rt Hon Denzil (Llanelli)
Jones, Martyn (Clwyd S W)


Davis, Terry (B'ham Hodge H'I)
Kilfedder, James


Dixon, Don
Kirkwood, Archy


Duffy, A. E. P.
Livsey, Richard


Ewing, Mrs Margaret (Moray)
Lofthouse, Geoffrey


Fearn, Ronald
Loyden, Eddie





McFall, John
Salmond, Alex


McKay, Allen (Barnsley West)
Sheerman, Barry


Madden, Max
Short, Clare


Mahon, Mrs Alice
Skinner, Dennis


Meale, Alan
Soley, Clive


Michie, Bill (Sheffield Heeley)
Spearing, Nigel


Michie, Mrs Ray (Arg'l &amp; Bute)
Steel, Rt Hon David


Morris, Rt Hon A. (W'shawe)
Taylor, Mrs Ann (Dewsbury)


Mullin, Chris
Taylor, Matthew (Truro)


Owen, Rt Hon Dr David
Wall, Pat


Parry, Robert
Wallace, James


Patchett, Terry
Wareing, Robert N.


Pike, Peter L.
Welsh, Andrew (Angus E)


Powell, Ray (Ogmore)
Wilson, Brian


Quin, Ms Joyce
Young, David (Bolton SE)


Rees, Rt Hon Merlyn



Richardson, Jo
Tellers for the Ayes:


Rogers, Allan
Mrs. Rosie Barnes and


Rooker, Jeff
Mr. John Cartwright.


Ruddock, Joan



NOES


Adley, Robert
Currie, Mrs Edwina


Aitken, Jonathan
Davies, Q. (Stamf'd &amp; Spald'g)


Alexander, Richard
Davis, David (Boothferry)


Alison, Rt Hon Michael
Day, Stephen


Allason, Rupert
Dorrell, Stephen


Amess, David
Douglas-Hamilton, Lord James


Amos, Alan
Dover, Den


Arbuthnot, James
Dunn, Bob


Arnold, Jacques (Gravesham)
Durant, Tony


Arnold, Tom (Hazel Grove)
Emery, Sir Peter


Ashby, David
Favell, Tony


Aspinwall, Jack
Fenner, Dame Peggy


Atkinson, David
Fookes, Dame Janet


Baker, Rt Hon K. (Mole Valley)
Forman, Nigel


Baker, Nicholas (Dorset N)
Forsyth, Michael (Stirling)


Batiste, Spencer
Forth, Eric


Bellingham, Henry
Fox, Sir Marcus


Bennett, Nicholas (Pembroke)
Franks, Cecil


Benyon, W.
French, Douglas


Bevan, David Gilroy
Fry, Peter


Blackburn, Dr John G.
Gale, Roger


Body, Sir Richard
Garel-Jones, Tristan


Boscawen, Hon Robert
Gill, Christopher


Boswell, Tim
Goodhart, Sir Philip


Bottomley, Peter
Gow, Ian


Bottomley, Mrs Virginia
Greenway, Harry (Ealing N)


Bowden, A (Brighton K'pto'n)
Greenway, John (Ryedale)


Bowden, Gerald (Dulwich)
Griffiths, Sir Eldon (Bury St E')


Bowis, John
Hague, William


Braine, Rt Hon Sir Bernard
Hamilton, Neil (Tatton)


Brandon-Bravo, Martin
Hanley, Jeremy


Brazier, Julian
Hannam, John


Bright, Graham
Hargreaves, Ken (Hyndburn)


Brooke, Rt Hon Peter
Harris, David


Brown, Michael (Brigg &amp; Cl't's)
Hayward, Robert


Browne, John (Winchester)
Heathcoat-Amory, David


Bruce, Ian (Dorset South)
Heddle, John


Buchanan-Smith, Rt Hon Alick
Heseltine, Rt Hon Michael


Budgen, Nicholas
Hicks, Mrs Maureen (Wolv' NE)


Burns, Simon
Hicks, Robert (Cornwall SE)


Burt, Alistair
Hill, James


Butcher, John
Hind, Kenneth


Butler, Chris
Hogg, Hon Douglas (Gr'th'm)


Butterfill, John
Holt, Richard


Carlisle, John, (Luton N)
Hordern, Sir Peter


Carlisle, Kenneth (Lincoln)
Howard, Michael


Carrington, Matthew
Howarth, Alan (Strat'd-on-A)


Carttiss, Michael
Howarth, G. (Cannock &amp; B'wd)


Cash, William
Howell, Ralph (North Norfolk)


Chalker, Rt Hon Mrs Lynda
Hughes, Robert G. (Harrow W)


Chapman, Sydney
Hunt, David (Wirral W)


Clark, Hon Alan (Plym'th S'n)
Hunter, Andrew


Clark, Dr Michael (Rochford)
Irvine, Michael


Clarke, Rt Hon K. (Rushcliffe)
Irving, Charles


Conway, Derek
Jack, Michael


Coombs, Anthony (Wyre F'rest)
Janman, Tim


Coombs, Simon (Swindon)
Jessel, Toby


Cope, Rt Hon John
Johnson Smith, Sir Geoffrey






Jones, Robert B (Herts W)
Rhodes James, Robert


Kellett-Bowman, Dame Elaine
Riddick, Graham


Key, Robert
Ridley, Rt Hon Nicholas


King, Roger (B'ham N'thfield)
Ridsdale, Sir Julian


Knapman, Roger
Rifkind, Rt Hon Malcolm


Knight, Greg (Derby North)
Rost, Peter


Knight, Dame Jill (Edgbaston)
Rowe, Andrew


Knowles, Michael
Sackville, Hon Tom


Lang, Ian
Shaw, David (Dover)


Lawrence, Ivan
Shaw, Sir Giles (Pudsey)


Leigh, Edward (Gainsbor'gh)
Shaw, Sir Michael (Scarb')


Lester, Jim (Broxtowe)
Shersby, Michael


Lilley, Peter
Sims, Roger


Lloyd, Sir Ian (Havant)
Skeet, Sir Trevor


Lloyd, Peter (Fareham)
Smith, Tim (Beaconsfield)


Lord, Michael
Speed, Keith


Macfarlane, Sir Neil
Speller, Tony


MacKay, Andrew (E Berkshire)
Spicer, Michael (S Worcs)


Maclean, David
Stanbrook, Ivor


McLoughlin, Patrick
Steen, Anthony


McNair-Wilson, Sir Michael
Stern, Michael


Malins, Humfrey
Stevens, Lewis


Mans, Keith
Stewart, Allan (Eastwood)


Maples, John
Stewart, Andy (Sherwood)


Marlow, Tony
Stradling Thomas, Sir John


Martin, David (Portsmouth S)
Summerson, Hugo


Mates, Michael
Taylor, John M (Solihull)


Maude, Hon Francis
Taylor, Teddy (S'end E)


Mayhew, Rt Hon Sir Patrick
Tebbit, Rt Hon Norman


Mellor, David
Thompson, Patrick (Norwich N)


Meyer, Sir Anthony
Thorne, Neil


Miller, Sir Hal
Thurnham, Peter


Mills, Iain
Townend, John (Bridlington)


Mitchell, Andrew (Gedling)
Townsend, Cyril D. (B'heath)


Mitchell, Sir David
Tredinnick, David


Moate, Roger
Trippier, David


Montgomery, Sir Fergus
Trotter, Neville


Morrison, Sir Charles
Twinn, Dr Ian


Moss, Malcolm
Vaughan, Sir Gerard


Moynihan, Hon Colin
Waddington, Rt Hon David


Mudd, David
Wakeham, Rt Hon John


Needham, Richard
Walker, Bill (T'side North)


Neubert, Michael
Waller, Gary


Newton, Rt Hon Tony
Wardle, Charles (Bexhill)


Nicholls, Patrick
Watts, John


Nicholson, David (Taunton)
Wheeler, John


Onslow, Rt Hon Cranley
Whitney, Ray


Oppenheim, Phillip
Widdecombe, Ann


Page, Richard
Wiggin, Jerry


Paice, James
Wilkinson, John


Parkinson, Rt Hon Cecil
Wilshire, David


Patnick, Irvine
Winterton, Mrs Ann


Porter, David (Waveney)
Wolfson, Mark


Powell, William (Corby)
Wood, Timothy


Price, Sir David
Young, Sir George (Acton)


Raffan, Keith



Raison, Rt Hon Timothy
Tellers for the Noes:


Rathbone, Tim
Mr. David Lightbown and


Redwood, John
Mr. Michael Fallon.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—

The House divided: Ayes 215, Noes 85.

Division No. 162]
[7.13 pm


AYES


Alexander, Richard
Baker, Rt Hon K. (Mole Valley)


Alison, Rt Hon Michael
Baker, Nicholas (Dorset N)


Allason, Rupert
Batiste, Spencer


Amess, David
Bellingham, Henry


Amos, Alan
Bennett, Nicholas (Pembroke)


Arbuthnot, James
Bevan, David Gilroy


Arnold, Jacques (Gravesham)
Blackburn, Dr John G.


Arnold, Tom (Hazel Grove)
Body, Sir Richard


Ashby, David
Boscawen, Hon Robert


Aspinwall, Jack
Boswell, Tim


Atkinson, David
Bottomley, Peter





Bottomley, Mrs Virginia
Janman, Tim


Bowden, A (Brighton K'pto'n)
Jessel, Toby


Bowis, John
Johnson Smith, Sir Geoffrey


Braine, Rt Hon Sir Bernard
Jones, Robert B (Herts W)


Brandon-Bravo, Martin
Kellett-Bowman, Dame Elaine


Brazier, Julian
Key, Robert


Bright, Graham
King, Roger (B'ham N'thfield)


Brooke, Rt Hon Peter
Knapman, Roger


Brown, Michael (Brigg &amp; Cl't's)
Knight, Greg (Derby North)


Browne, John (Winchester)
Knight, Dame Jill (Edgbaston)


Bruce, Ian (Dorset South)
Knowles, Michael


Buchanan-Smith, Rt Hon Alick
Lang, Ian


Budgen, Nicholas
Lawrence, Ivan


Burns, Simon
Leigh, Edward (Gainsbor'gh)


Burt, Alistair
Lester, Jim (Broxtowe)


Butcher, John
Lilley, Peter


Butler, Chris
Lloyd, Sir Ian (Havant)


Butterfill, John
Lloyd, Peter (Fareham)


Carlisle, John, (Luton N)
Lord, Michael


Carlisle, Kenneth (Lincoln)
Lyell, Sir Nicholas


Carrington, Matthew
Macfarlane, Sir Neil


Carttiss, Michael
MacKay, Andrew (E Berkshire)


Cash, William
Maclean, David


Chapman, Sydney
McLoughlin, Patrick


Clark, Hon Alan (Plym'th S'n)
McNair-Wilson, Sir Michael


Clark, Dr Michael (Rochford)
Malins, Humfrey


Clarke, Rt Hon K. (Rushcliffe)
Mans, Keith


Conway, Derek
Maples, John


Coombs, Anthony (Wyre F'rest)
Martin, David (Portsmouth S)


Coombs, Simon (Swindon)
Mates, Michael


Currie, Mrs Edwina
Maude, Hon Francis


Davies, Q. (Stamf'd &amp; Spald'g)
Mayhew, Rt Hon Sir Patrick


Davis, David (Boothferry)
Mellor, David


Day, Stephen
Meyer, Sir Anthony


Dorrell, Stephen
Miller, Sir Hal


Douglas-Hamilton, Lord James
Mills, Iain


Dover, Den
Mitchell, Andrew (Gedling)


Dunn, Bob
Mitchell, Sir David


Durant, Tony
Moate, Roger


Emery, Sir Peter
Montgomery, Sir Fergus


Favell, Tony
Morrison, Sir Charles


Fenner, Dame Peggy
Moss, Malcolm


Fookes, Dame Janet
Moynihan, Hon Colin


Forman, Nigel
Mudd, David


Forsyth, Michael (Stirling)
Needham, Richard


Forth, Eric
Neubert, Michael


Fox, Sir Marcus
Newton, Rt Hon Tony


Franks, Cecil
Nicholls, Patrick


Fry, Peter
Nicholson, David (Taunton)


Garel-Jones, Tristan
Onslow, Rt Hon Cranley


Gill, Christopher
Oppenheim, Phillip


Goodson-Wickes, Dr Charles
Page, Richard


Gow, Ian
Paice, James


Greenway, Harry (Ealing N)
Parkinson, Rt Hon Cecil


Greenway, John (Ryedale)
Patnick, Irvine


Griffiths, Sir Eldon (Bury St E')
Pattie, Rt Hon Sir Geoffrey


Hague, William
Porter, David (Waveney)


Hamilton, Neil (Tatton)
Raffan, Keith


Hanley, Jeremy
Raison, Rt Hon Timothy


Hannam, John
Rathbone, Tim


Hargreaves, Ken (Hyndburn)
Redwood, John


Harris, David
Rhodes James, Robert


Hayward, Robert
Riddick, Graham


Heathcoat-Amory, David
Ridley, Rt Hon Nicholas


Heddle, John
Ridsdale, Sir Julian


Heseltine, Rt Hon Michael
Rifkind, Rt Hon Malcolm


Hicks, Robert (Cornwall SE)
Rost, Peter


Hill, James
Rowe, Andrew


Hind, Kenneth
Sackville, Hon Tom


Hogg, Hon Douglas (Gr'th'm)
Shaw, David (Dover)


Holt, Richard
Shaw, Sir Giles (Pudsey)


Howard, Michael
Shaw, Sir Michael (Scarb')


Howarth, Alan (Strat'd-on-A)
Shersby, Michael


Howarth, G. (Cannock &amp; B'wd)
Sims, Roger


Howell, Ralph (North Norfolk)
Smith, Tim (Beaconsfield)


Hughes, Robert G. (Harrow W)
Speed, Keith


Hunt, David (Wirral W)
Speller, Tony


Hunter, Andrew
Spicer, Michael (S Worcs)


Irvine, Michael
Stanbrook, Ivor


Jack, Michael
Steen, Anthony






Stern, Michael
Waddington, Rt Hon David


Stevens, Lewis
Walker, Bill (T'side North)


Stewart, Allan (Eastwood)
Waller, Gary


Stewart, Andy (Sherwood)
Wardle, Charles (Bexhill)


Stradling Thomas, Sir John
Watts, John


Summerson, Hugo
Wheeler, John


Taylor, John M (Solihull)
Widdecombe, Ann


Taylor, Teddy (S'end E)
Wiggin, Jerry


Tebbit, Rt Hon Norman
Wilkinson, John


Thompson, Patrick (Norwich N)
Wilshire, David


Thorne, Neil
Winterton, Mrs Ann


Thornton, Malcolm
Wolfson, Mark


Thurnham, Peter
Wood, Timothy


Townsend, Cyril D. (B'heath)
Young, Sir George (Acton)


Tredinnick, David



Trippier, David
Tellers for the Ayes:


Trotter, Neville
Mr. David Lightbown and


Twinn, Dr Ian
Mr. Michael Fallon.


Vaughan, Sir Gerard



NOES


Barnes, Harry (Derbyshire NE)
Dixon, Don


Barnes, Mrs Rosie (Greenwich)
Duffy, A. E. P.


Beckett, Margaret
Dunwoody, Hon Mrs Gwyneth


Beith, A. J.
Eadie, Alexander


Boateng, Paul
Ewing, Harry (Falkirk E)


Boyes, Roland
Ewing, Mrs Margaret (Moray)


Campbell, Menzies (Fife NE)
Fisher, Mark


Campbell-Savours, D. N.
Flannery, Martin


Carlile, Alex (Mont'g)
Fyfe, Maria


Cartwright, John
George, Bruce


Clark, Dr David (S Shields)
Godman, Dr Norman A.


Clay, Bob
Golding, Mrs Llin


Clelland, David
Gordon, Mildred


Clwyd, Mrs Ann
Hardy, Peter


Cohen, Harry
Haynes, Frank


Cook, Robin (Livingston)
Heffer, Eric S.


Corbett, Robin
Henderson, Doug


Corbyn, Jeremy
Hogg, N. (C'nauld &amp; Kilsyth)


Dalyell, Tam
Howell, Rt Hon D. (S'heath)


Davis, Terry (B'ham Hodge H'I)
Howells, Geraint





Hughes, John (Coventry NE)
Quin, Ms Joyce


Hughes, Simon (Southwark)
Redmond, Martin


Johnston, Sir Russell
Rees, Rt Hon Merlyn


Jones, Martyn (Clwyd S W)
Richardson, Jo


Kilfedder, James
Rooker, Jeff


Kirkwood, Archy
Ruddock, Joan


Leighton, Ron
Salmond, Alex


Livsey, Richard
Sheerman, Barry


Lloyd, Tony (Stretford)
Short, Clare


Lofthouse, Geoffrey
Soley, Clive


Loyden, Eddie
Spearing, Nigel


McFall, John
Steel, Rt Hon David


McKay, Allen (Barnsley West)
Taylor, Mrs Ann (Dewsbury)


Madden, Max
Taylor, Matthew (Truro)


Mahon, Mrs Alice
Wall, Pat


Meale, Alan
Wallace, James


Michie, Bill (Sheffield Heeley)
Walley, Joan


Michie, Mrs Ray (Arg'l &amp; Bute)
Wareing, Robert N.


Morris, Rt Hon A. (W'shawe)
Welsh, Andrew (Angus E)


Mullin, Chris
Young, David (Bolton SE)


Owen, Rt Hon Dr David



Parry, Robert
Tellers for the Noes:


Patchett, Terry
Mr. Dennis Skinner and


Pike, Peter L.
Mr. Bob Cryer.


Powell, Ray (Ogmore)

Madam DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House expresses full support for the proposals set out in the White Paper "Working for Patients" and believes that these will lead to a Health Service that is more responsive to the needs of patients, and will enable those hospitals which best meet the needs of patients to get the money to do so, will reduce waiting times, improve the quality of care, help family doctors to develop the services they provide for their patients, improve the effectiveness of National Health Service management, and ensure that all those concerned with delivering health care make the best use of the resources available to them.

Birmingham City Council (No. 2) Bill

Order for Second Reading read.

Mr. Jeff Rooker: On a point of order, Madam Deputy Speaker. I apologise for intervening on a point of order so early in the debate, but I would like you to clarify a ruling, if possible. Under the Standing Orders of the House, would it be appropriate for any Member speaking in the debate who has enjoyed free tickets and free hospitality at the annual super prix to declare that? That is a common practice and any interest on the part of those speaking for and against the proposals tonight should be placed on record.

Madam Deputy Speaker (Miss Betty Boothroyd): That is a matter for individual Members, but I am sure that those who have an interest to declare will make it clear to the House in the normal way.
Before we begin the debate, I refer the House to the fact that Mr. Speaker has selected the instruction, which may be referred to on Second Reading.

Mr. Roger King: I beg to move, That the Bill be now read a Second time.
In deference to the request of the hon. Member for Birmingham, Perry Barr (Mr. Rooker), my family and I have been frequent attenders of the super prix. Indeed, I was a competitor at the first super prix event and, until last year, I could say with some honesty that I was the fastest Birmingham resident to travel the streets of that city. In the first race, I exceeded 100 mph. This year I have been superseded by another Birmingham resident who went a great deal faster than that in a race. I hope that I have satisfied the hon. Member for Perry Barr that I have experienced the super prix, and am delighted to have done so.

Ms. Clare Short: The hon. Gentleman will be aware that the expenditure on free tickets and hospitality at the road race is large and a matter of controversy. Will he estimate the quantity and value of the free hospitality and tickets provided to him and his family?

Mr. Roger King: I cannot exactly recall the price of the tickets, so I cannot provide that information. Children under 14 are not charged anyway, and the number of nibbles that they had in the so-called hospitality tent was very modest. So were my own tastes, I may add: as I recall, I was actually locked out of the tent one year because it was too crowded.

Mr. Iain Mills: Can my hon. Friend confirm to one who also enjoyed that hospitality that there were more members of the Labour party than Conservatives in the tent, and that more had free tickets?

Mr. King: My hon. Friend has raised an interesting point. As I remember, at the first event we were graced, if that is the right expression, by none other than Mr. Derek Hatton, who had come to see how Birmingham got on with running such an event. I do not know whether it had any effect on what he has been doing since then. The event attracted considerable civic attendance from further afield, and I was aware of the presence of a large number of Labour councillors and others enjoying the limited hospitality that was available.

Mr. Denis Howell: Will the hon. Gentleman give way?

Mr. King: I am only two lines into my speech, but yes, I will.

Mr. Howell: I hope that the debate develops on a rather higher plane. But in answer to a question that Opposition Members are asking—whether Mr. Denis Thatcher tended to receive such hospitality—he attended as a director of Halfords, the main sponsor of the event, and put a considerable amount of money into it. I hope that we shall hear no more of such pettiness.

Mr. King: I quite agree with the right hon. Gentleman. I think that we should now move on to discuss the main elements of the Bill.

Mr. Peter L. Pike: rose—

Mr. King: I shall give way, but I hope that this will be the last intervention.

Mr. Pike: As a Member with no direct involvement, who wants to find out whether the Bill is in the interests of Birmingham and its residents, I am sure that the hon. Gentleman will be somewhat concerned that Halfords has written to all Members with Halfords superstores in their constituencies urging them to support the Bill. Does he think that the Bill is more important to Halfords than to the people of Birmingham?

Mr. King: That is another interesting point. The element of sponsorship has been one of the major assets of the super prix, which attracts more sponsorship than any other motor race in the United Kingdom except the formula 1 grand prix meeting at Silverstone. As a result of paying large sums in sponsorship, Halfords benefits considerably from media coverage of the super prix, and I think that it is entitled to put its view across.
With its superstore concept the company has expanded dramatically, bringing thousands of badly needed jobs to inner-city areas, redeveloping rundown areas into new and attractive one-stop shopping for the motorist and providing car servicing at an economic price. I think that Halfords has something worth shouting about, and that it is entitled to write to Members saying how important the super prix is in highlighting its services and products.
How fitting it is that, on the day on which Toyota has announced its massive £700 million investment in the midlands, we should debate a subject that centres on the motor car. While to some motor racing is a rich man's pastime, to the motor industry it is still a focal point of engineering activity and a window to the world for our national prowess in automotive technology. What better place to celebrate that expertise than the centre of our country, in the streets of Birmingham—a city that still depends so much on the motor car and its future?
Having gone through difficulties in the recent past, our motor industry is now stronger than it has been for many years, providing good-quality products—not just cars and other commercial vehicles, but components. Racegoers will see very few foreign-built single-seater racing cars on our world tracks. No French, German, Italian or even Japanese cars are entirely built by those countries. It is Britain chassis design and engine technology that so often lead the way in motor racing.
It is worth pointing out that at Indianapolis, where one of the oldest motor races in the world takes place, the vast


majority of cars that come to the start grid are British-designed and British-built. I do not think that we shout loud enough about that. [Interruption.] I said that most cars to be seen in a race were British. Toyota uses a British chassis, British engineering, British road-holding equipment and British components. The engine at the back is a Toyota unit, yes, but British engineers have tuned it up. In the type of motor racing that takes place in Birmingham—the super prix and international formula 3000 racing—we are pre-eminent in providing the competitive products that teams from throughout the world use during a season.
The background to the Birmingham super prix is well documented. We had a Second Reading debate about it on 1 April 1985, and it was admirably promoted by Sir Reginald Eyre, whom the House now misses. He delivered a cogent, sensible and enthusiastic speech on why Birmingham should capitalise on the opportunities to stage a motor race in its city environment. He could only do so, however, because the local authority had decided, by a significant majority, to promote a Bill to allow that motor race to be held. The Bill enjoyed all-party support. Strangely, a Labour administration on the city council was keenest to promote a motor race in the city.
This Bill has also received substantial support from the city council: 75 members were in favour of it, and of the 16 who were not, six abstained. It can be said, I think, that the Bill comes to the House from the people of Birmingham, whose elected representatives have debated at great length whether to seek a further Bill to allow us to run the motor race that we want.

Mr. Rooker: May I make a small point? Birmingham city council has 117 members. Where were the other 20? What list are they on?

Mr. King: I am only quoting the figures that I have here. Perhaps the hon. Gentleman will be able to guide me. I suppose that those people, for one reason or another, were not present to cast their vote. The number 20 rings a slight bell: I recall that there is a militant section within the ruling party in the town hall with a name similar to "the Grosvenor group", whose members do not agree with anything that the council is doing. They are now contesting the leadership. Because their attitude is always derogatory and they are always seeking to disrupt their own party, presumably they stayed away that day.
I think that we would all agree, however, that the fact that a Member is not in the House of Commons to cast his vote does not imply that he is either for or against the motion. We always decide questions on the basis of the votes of Members who vote when the opportunity is there. Nevertheless, it is not all that difficult to go to the town hall to cast a vote, and I see no reason why those people should not have gone. I can only imagine that their absenteeism—if that is what it was—meant that they did not feel able to support the measure.

Ms. Short: The group that the hon. Gentleman has just misdescribed came together over the issue of whether Martineau house, a home providing holidays for disabled children in our city, should be closed. Will the hon. Gentleman give us his view on whether the home should have been closed?

Mr. King: I shall not be led up that road. The Conservative view was that that house should not have

been closed. The hon. Lady's point is utterly irrelevant to the debate. I have no intention of being steered away from the main topic of the debate, the super prix.
In1985, Birmingham city council was given the power to run motor racing through the city centre. The intentions of the city council were stated in the preamble to the Birmingham City Council Act 1985, which states:
The city is a major commercial and industrial centre and with a view to promoting the city, encouraging tourism and attracting business it is expedient that the council is authorised to provide or arrange for the provision of motor races on certain streets in the city".
That preamble places the motor race, which became known as the Birmingham super prix, within an overall economic development strategy.
The recession in the 1970s and early 1980s which severely affected Birmingham's traditional manufacturing base and resulted in record levels of unemployment, focused attention on the need for the city to diversify into service-sector employment. The tremendous success of the national exhibition centre in attracting new wealth and new employment led the way. The economic benefit of visitors and their spending power in leisure and business tourism was recognised as a significant vehicle for creating labour-intensive industry in hotels, leisure and associated trades.
Hon. Members from all sides of the House will probably pay tribute to the way in which the city has revitalised Birmingham, which in the past few years has developed from an area of despondency and decline which some felt was irreversible. Thanks to the determination of all its elected representatives and the people of Birmingham, the city has proved that it can find a new path to prosperity and new opportunities by concentrating and targeting on new avenues of commercial enterprise, not on the bedrock of manufacturing but on a new tourist centre.

Dr. John G. Blackburn: Does my hon. Friend agree that the House should welcome the proposal by the Labour administration in Birmingham to produce the Bill, because it benefits not only the motor industry but the entire west midlands? I represent Dudley, and many components are manufactured in my constituency. The components industry is dependent on the promotion of the motor car and the motor industry. Does he agree that that is an important factor?

Mr. King: My hon. Friend is quite correct, but the impact of the motor race has far wider implications than the immediate environment of our constituencies and affects the whole region. When such an event is promoted by the media and on television, the region benefits. A great city such as Birmingham, with nearly 1 million people, can embark on promotions on a scale which places such as Dudley would have to contemplate extremely carefully. Dudley does not have the the facilities or the ability to promote such an event; nevertheless, Dudley will gain from Birmingham being the vital, throbbing heart of the region's strong economic activity.
A series of ambitious and imaginative schemes were devised by the city council to stimulate leisure and business tourism. On the sporting front, a major athletics stadium, the Alexander stadium, was constructed to international specification, capable of hosting major events such as the European junior championships, international meetings, and the Women's Amateur Athletics Association/


Amateur Athletics Association national championships and Olympic qualifying meetings. The national indoor sports arena is soon to be built in the city centre. Those who have seen the architects' drawings know that that will be a tremendous asset for Birmingham and for the region. The national exhibition centre, which is being extended, hosts major sporting events such as the European figure skating championships in January 1989.
The development of sport as a people attraction resulted in Birmingham's ambitious bid to host the 1992 Olympic games. I pay tribute to the right hon. Member for Birmingham, Small Heath (Mr. Howell) who is present today and who so ably led our delegation all over the world. As the years go by, we appreciate the great ambassadorial work that he did. Its effects are still being felt, because it focused world attention on Birmingham's ability to do things, to think big and to act big. If a great city such as Birmingham does not have confidence in itself, how can it show confidence in its people and promote the future we want for our citizens?
On the cultural level, the city council has invested heavily in its theatres, the city of Birmingham symphony orchestra and new festivals for jazz, film, readers and writers. It has recently agreed to relocate Sadler's Wells—a major achievement. We are not simply debating vroom, vroom for Brum, Brum and the promotion of a motor race, but promoting the city for cultural reasons, not only for sport and excitement. I was delighted when the hon. Member for Birmingham, Erdington (Mr. Corbett) tabled an early-day motion which was signed by most hon. Members representing Birmingham constituencies, welcoming the Sadler's Wells ballet to the city at some cost to the ratepayers, but I did not notice anyone demurring from that, because investment in such activities can only benefit our city and it is right and proper that a limited amount of promotional, recreational and cultural activity should take place.
On the business tourism front, a major new international convention centre is being constructed in the city centre, transforming a rundown area into a major development alongside the national indoor arena—an extensive leisure development opposite the new Hyatt hotel presently being constructed.
Some of my hon. Friends will wish to talk about the extent of the advances in tourism in the city. Birmingham is now the fifth most visited British city. That is a great achievement. It has not been instant, but it has developed because we are providing those facilities. About 40 hotels are currently being planned, built or opened as a result of the major new initiative in developing the city.

Ms. Short: The international convention centre and the highly subsidised Hyatt hotel are in my consituency. The development borders on an extremely rundown estate which has had no work done on it for years and has no community facilities and has more than 30 per cent. unemployment. The problem is that all those subsidies to the private sector are failing to bring resources to people in need in Birmingham.

Mr. King: The hon. Lady has answered her own problem. The national conference centre, the indoor sports arena, the Hyatt hotel and other developments currently under way are providing or will provide thousands of jobs

for people in the immediate environment. That is the crux of the issue. Those places will have to be manned, maintained and run, and there is no reason why the hon. Lady's constituents should not find work. I admit that there are problems in the inner city, but they will be solved not simply be doling out money on a weekly basis, but by providing the infrastructure from the commercial sector wherever possible with help from the local authority to create jobs and provide opportunities for those people. I believe that the city council has been successful in providing that.
The Birmingham super prix has been part of the economic strategy. It is a high-profile, ambitious statement of intent that Birmingham is changing, married to the traditional engineering and organisational skills of the city. The Birmingham super prix has proved particularly successful in fulfilling the requirements set by the promoters of the Bill a few years ago.
Within those three years, the super prix has become established as a national event, as well as a sporting occasion. The organisers have created a festival that appeals to a family audience and one has only to visit it, as some of my hon. Friends have, to see that. I would have found it difficult to comment on the running of such an event had I not been there to see for myself what it means to the population in the surrounding area and to the economy of the city. Not only are there two days of motor racing, but the city comes to life, with street theatre and circus. Because the community has something to do in an area where it has been denied it for so long, criminal activity usually registers an all-time low. We are not surprised that, when the event takes place, there are few problems of violence and theft or the other traditional problems we associate with an inner-city environment.
The event has quickly developed and achieved high profile media coverage with live television and national news attention promoting the city of Birmingham. It has drawn a crowd the majority of whom come from outside Birmingham. At last year's event, market research showed that on Monday, 23 per cent. came from Birmingham, 29 per cent. from the midlands and 48 per cent. from the rest of the country. If we were trying to attract inward investment into the city, we could not have a better means than the super prix, because half the people watching it come from well outside the midlands. They are taking back home the visual impact of a city that is alive and dynamic, and in which investment is not misplaced.

Mr. Michael Jack: Can my hon. Friend confirm that many of the hospitality suites situated around the super prix circuit are taken by companies from all over the United Kingdom with national and international connections and that they bring to Birmingham many business people who gain the impression that my hon. Friend has put forward so eloquently this evening?

Mr. King: My hon. Friend is right. He has visited the super prix and he said to me how envious he was that the city had been able to have such an event established. As the years go by and the event matures, it becomes increasingly self-perpetuating because of investment by many of the companies and organisations that relish the prospect of having a hospitality suite at a motor race meeting where, if it were not for the fencing, it would be almost possible to reach out and touch the cars. The cars are not right over


the other side of an airfield circuit, but are passing by the side of the spectators. That gives a unique dimension to an exciting sport.
There is high national public awareness of the event. An opinion poll conducted outside the midlands showed that 47 per cent. of those asked recognised Birmingham as the home of city centre motor racing. In the short space of three years, we have got the message home to the people who have visited the city that we are the capital of inner-city motor racing.
The event has brought direct economic benefits to the tourist industry. A survey of local hotels showed an increase of 110 per cent. in hotel occupancy and in terms of visitor expenditure, that represents about £500,000. Day visitors account for at least as much. The direct spending by the city council on the event represents more than £750,000 spent locally. Those figures are indicative of the cash injection in the local economy.
The city centre shops, which now open on the bank holiday, are well satisfied with the business generated by the motor race. In the first year of the event we had a problem. Many of the shopkeepers felt that the event would not bring them much custom because everybody would be watching the motor race. By a process of coaxing, they have gradually opened up their shops. We now find that, while the menfolk are watching the motor race, the ladies are shopping. That is an admirable development and a splendid opportunity for the city to offer a family day out, which one cannot enjoy at Silverstone or Brands Hatch. It is a major plus point.
It is important for the life of the city centre that its shops can compete over bank holidays with the attraction of the out-of-town shopping centres, and the motor race has enabled them to do that. We often hear about out-of-town planning developments, so to have an event that brings people into the city centre at a time when it would normally be deserted is significant in providing a living, dynamic and vibrant city centre.
The Birmingham super prix is now the second most prestigious motor race in the United Kingdom. It is the most prestigious round of the international formula 3000 championship and enables many teams of drivers to attract the sponsorship necessary to compete in the championship. The crowd is second in size only to the British grand prix and is the largest of any round of the international formula 3000 championship.
The Birmingham super prix has gone a long way to meeting the objectives of those who first envisaged the event almost 20 years ago, but just in case anyone feels that all I am reporting is a business bonanza, I must reveal that that learned organ of the capitalist press Marxism Today enthused about the race, considering it a Socialist achievement which has taken motor racing to the masses. With that endorsement, who can go wrong?
There are some constraints on the event which require legislative change, which is why we are here this evening. I shall now deal with some of the changes that the Birmingham City Council (No. 2) Bill seeks to bring about, so that we can continue to develop successfully this major attraction. The Birmingham City Council Act 1985 conferred on the city powers to run motor racing, but within certain constraints. The experience of having held the event for three years has resulted in the city council needing amendments to legislation to enable the city to overcome technical problems, to enhance the event and to reduce costs.
The Bill seeks to amend the 1985 Act in a number of ways. Firstly, it seeks to extend the number of days and to have more flexibility of dates to enable the super prix to continue. At present, it is confined to taking place on the Sunday and Monday on one of the two May bank holiday weekends or the August bank holiday weekend. It has been held over the August bank holiday weekend for the past three years and will be held again this year at that time. It is now proposed to extend the number of days available from two to four and to allow flexibility of dates so that the event can end on a Sunday or a bank holiday Monday in May, June, July, August or September.
There are powerful reasons for that. The formula 3000 international championship round held in Birmingham now requires three days, which is an international rulling outside the control of the city. We are fortunate in having a waiver for this year so that we can hold the race over two days, but that waiver will not continue, so we must extend the time in which the race can be held. Birmingham is granted a waiver through the international motor sport authority, FISA, to enable the event to run for two days.
Birmingham city council needs to protect the international stature of the event, as it has a track record of promoting the event over the past three years in a way that is attractive to the media, to the sponsors and to the spectators. The city wants especially to guarantee television coverage. Without the formula 3000 prestigious international race, which is only one step down from grand prix racing proper, the whole event would be in jeopardy. Birmingham city council therefore needs an extension to three days.

Mr. Robin Corbett: The hon. Gentleman has made an argument for extension from two to three days, but has not yet spoken about a fourth day. As I understand it, the only circumstances in which the city council would require the powers for a fourth day would be if a grand prix were offered and the city council was prepared to fork out £1 million for the privilege of staging it.

Mr. King: I was coming on to that important point in a moment.
Secondly, Birmingham city council believes that it has proved the super prix to be a major motor racing event. We should now be in a position to promote the most prestigious motor racing event, a grand prix, should one be offered. That would require four days. The city council wants to welcome back all the drivers now in grand prix racing who have driven at the Birmingham circuit over the past three years. Many drivers in formula 3000 go on to formula 1 racing, which is more prestigious. It is recognised that there is intense competition throughout the world for grand prix racing and that unless Birmingham city council is capable—I stress that word—of offering four days to the international motor sport authorities, it will never be offered a grand prix.
Thirdly, the difficulty is that, should the city be offered a grand prix, it could well fall on dates that are not at present available for it. In answer to what the hon. Member for Erdington said, it is not the city council's' intention actively to obtain a formula 1 grand prix. In any case, they are difficult to get. However, there may come a time when there will be the opportunity to stage such a prestigious event.
There is no doubt that a formula 1 grand prix meeting requires an outlay of about £1 million and, as the hon. Member for Erdington said, it will have to be debated by the local council at some considerable length. Indeed, it is only right and proper that the council should do so. However, in no way does this change in the legislation bring nearer the holding of a formula 1 meeting. Ultimately, it will be the city council that will have to debate the merits of investing that sort of money if the opportunity occurs, but frankly, I cannot see that happening for many years.
The plus side is that £1 million up front, if one can use that expression, stands a chance of earning a city such as Birmingham many more millions of pounds in income from the teams and from the enormous extra number of people who will come to the city during the three or four days that the circuit is available for use for practice or for the main event.

Mr. Rooker: Does the hon. Gentleman not appreciate that, in laying the foundations for such an event in the way that he has just explained, the city council would be required to overturn completely its stated policy from day one—a policy that is currently maintained—of not allowing cigarette advertising on the circuit? One cannot have formula 1 grand prix and keep that policy. Does the hon. Gentleman envisage that we should bring the merchants of death on to the streets of Birmingham? Is that what is in the minds of the promoters? Many consequences would flow from such a decision and would overturn existing commitments and promises that were given and received in good faith.

Mr. King: I know that that point concerns the hon. Gentleman, because it concerned him in relation to the original Bill in 1985. If my memory serves me correctly, such a situation has occurred before in formula 1 racing. Certain cars with cigarette advertising on them have had to have that advertising blanked over during meetings in a particular country. In any case, the criticism that the hon. Gentleman has rightly pointed out would be a matter for debate by the local authority, which may well decide that such an event is not for them because of the restrictions that may be placed on it by the Formula 1 Contractors' Association, which at some stage may say, "No, we are not going to abide by any cover-up of cigarette advertising."
As it is, I believe that only two teams, Camel Lotus and McClaren, are closely identified with cigarette advertising and use colours that are associated with popular cigarettes. That is a tenuous connection, and as far as I know no overt publicity or promotion is given to the event in that way—

Mr. Rooker: But smoking kills people.

Mr. King: I stress that, if the opportunity of a formula 1 race meeting is offered to the city, it will be the subject of most intense debate and the point raised by the hon. Gentleman will no doubt be discussed by the local authority.

Mr. Rooker: I am sorry, but I shall have to press this, because the hon. Gentleman has failed to meet the point. One of the reasons that this House, in its wisdom, gave Birmingham approval for the 1985 Act—we all agreed with it when it finally went through for reasons that I shall

explain later—was the commitment that was given, but that commitment is not written into the Act. If the city council wishes to overturn its policy on tobacco, it does not have to come back to the House. Given the fact that the biggest cause of death in this country is coronary heart disease and that the biggest single independent factor involved in those 3,000 deaths per week is smoking, I should be even more opposed to all this than I was before. However, as a Member of Parliament, I would be prevented from raising the matter, because the event will have been sub-contracted to the local authority.

Mr. King: I have no doubt that, if the opportunity arose to stage a formula 1 meeting—it is a slender one—the hon. Gentleman would have the opportunity to press his point.
If the city council wishes to offer amendments to what it has formerly agreed—as the hon. Gentleman rightly pointed out, that commitment is not included in the Act—it is for the city council to try to persuade the hon. Gentleman that there will be adequate safeguards. If a formula 1 race meeting is agreed by the city council, I imagine that it will be agreed on certain conditions with the Formula 1 Contractors Association. If people agreed that cigarette advertising was anathema to the local authority—to be fair to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) I must confess that I would support that view—the contractors would be required to remove such advertising from their cars.
There is nothing new here. The issue will be considered on its merits and I have no difficulty in saying that the local authority and its Members of Parliament—presumably we shall all be consulted—will have an opportunity to make our voices known.

Mr. Terry Davis: The hon. Gentleman may not be aware that, when the previous Act was introduced in the House in 1985, objections to tobacco advertising were raised by myself and my hon. Friends. I was given a written assurance by a senior member of the council—

Ms. Short: It is not worth anything.

Mr. Davis: My hon. Friend says that that assurance is not worth anything, but I shall draw attention to what I regard as assurances that have been broken later in the debate if I succeed in catching your eye, Mr. Deputy Speaker.
I advise the hon. Member for Birmingham, Northfield (Mr. King) that I was given written assurances that there would be no cigarette advertising connected with the event. Will the hon. Gentleman make it quite clear to the House, because he is now responsible for sponsoring this Bill, whether he regards the city council as having an option to keep that assurance?

Mr. King: I have no problems in saying that, if the city council made those assurances—and yes, it did; we were all here when we debated the original Bill in April 1985—I see no reason why that agreement should have been rescinded in any way. I think that it still holds absolutely good, and there should be no problems on that score.

Mr. Davis: I must press the hon. Gentleman. Will he give a categorical assurance as the hon. Member promoting the Bill that he would not condone any decision


to allow cigarette advertising in the course of a grand prix event—and what is more, that it will not happen because of the assurance that was given to hon. Members in 1985?

Mr. King: I thought that I had just made that point quite clear. I am giving that assurance. As far as I am aware, nothing has changed from what was previously agreed. Unless the hon. Gentleman can produce a letter saying that things have changed, we must assume—I assume and I give him the assurance—that that commitment still holds good and that there is no question of cigarette advertising being allowed on racing cars or even of the promotion of cigarettes being allowed within the environment of the circuit. I willingly give the hon. Gentleman that assurance. I cannot imagine that anyone would want to change such an assurance.

Mr. Jack: Perhaps I can assist my hon. Friend by telling him that, at the moment, the West German grand prix requires that all forms of written promotion for cigarette advertising be removed from the cars, and that is what happens. The cars remain in their colours but there are no sponsors' names on them. Does my hon. Friend agree that motor sport is now increasingly being used as a promotional tool for another environmentally sensitive issue—lead-free petrol?

Mr. King: My hon. Friend made a good point at the end of his intervention and I am grateful to him for reminding me that it is in the West German grand prix that such advertising is removed. Therefore, the safeguards do exist, and I can give the hon. Member for Birmingham, Hodge Hill (Mr. Davis) an assurance on behalf of the promoters that what was previously agreed still holds good now. There is no question of us going back on that.
It is also a requirement in the revised rules of running a formula 3000 event that the circuit must be altered to provide a safer pit area. At the moment, the area is somewhat confined and cars have to decelerate quite quickly and engage in a few twists and turns to get into the pit area. In addition, the acceleration lane is not long enough to allow them to build up to a circuit speed. Although the circuit is perfectly safe, it is felt by FISA and the organisers of formula 3000 that improvements have to be made.
The city council wishes to do that by changing the circuit slightly to enable racing to take place on the inward carriageway of Bristol street, thus releasing the outward carriageway of Bristol street for use as pits. That would require the construction of a short link road between the two carriageways. It will make for a more attractive and interesting motor race and one which, by implication, will be a great deal safer.
Clause 7, the new section 4(2) in schedule 3, and clause 6(1) involve longer highway closures. Under the 1985 Act powers, highways are closed for the event from 9 am to 6 pm. At the request of the police, highways are in fact closed from 6 am under the Town Police Clauses Act 1847. The city council wishes to have that additional time specifically mentioned in the Act.
Racing—by which I mean practice—will not take place on any day before 9 am. In addition, two additional hours at the end of racing are proposed to allow racing to finish should there be any delays during the day due to crashes. Because of bad weather and incidents on the circuit, we have experienced delays because of the time taken to restore the circuit to its

correct and safe state. Last year, that resulted in us losing two races at the end of the day, when we had to close the circuit and re-open the roads at 6 pm.
Speaking as a witness and as a pure matter of fact, there is little sense in losing such races, because the amount of public access to the roads for two or three hours after 6 o'clock on a bank holiday Monday is negligible. That is thanks to the superb arrangements made by the West Midlands police to route traffic away from the circuit. We submit that for the circuit to be used for an extra two or three hours would not excessively infringe anyone's right of movement.

Ms. Short: The hon. Gentleman has forgotten that people live within the circuit and for them getting in and out of their houses and driving their cars to the shop or church in the evening is a serious concern. They do not welcome the extension of hours.
If it was legal to close the streets for longer than the times granted under the Town Police Clauses Act 1847, why are those powers needed in this Bill? Has there been some doubt about the legality of the extended road closing in previous years?

Mr. King: As far as I know, the hon. Lady can rest assured that there is no illegality. The police have powers to make limited closures in the way that I have described under the Town Police Clauses Act 1847. However, I believe that, to put this on a regular basis, it is right that the promoters should bring the Bill to the House to request that it be written into the Act. With the permission of the House, we are extending the days from two to four and in that way exceed the limited role of the police to make specific changes now and again. We need to study the implications behind such extension of road closures. Other hon. Members may wish to speak about the reaction of the local community to the city's proposals through, for example, opinion poll sampling, and, perhaps, Mr. Deputy Speaker, you will allow such debate.

Mr. Terry Davis: On the question of closing the roads for certain periods of certain days, will the hon. Gentleman clarify the meaning of the Bill that he is introducing? The Bill would make it possible for the city council to close the roads for four days instead of two, as at present, and to close them for four days at any time between the end of April and the beginning of October, with the fourth day being either a bank holiday or a Sunday. Will the hon. Gentleman confirm that the effect of the Bill is that the city council can decide to have a road race on any Thursday, Friday, Saturday and Sunday between the beginning of May and the end of September, to close the streets for all four days and to close them until 8 o'clock instead of 6 o'clock in the evening?

Mr. King: That is a fair summation of what we propose.

Mr. Davis: In that case, why did the hon. Gentleman tell the House that there was no problem, because it involved only two hours on a bank holiday Monday?

Mr. King: As a result of experience, a certain number of engineering days are allowed to set up and to dismantle the circuit, to which clauses 3(b) and 6 refer. Under the 1985 Act, the number of days available for the safety fence erection works is 10 days before and five days after the event. The city council wishes to extend that to 20 days


after the event. That will minimise the engineering works undertaken in anti-social hours, thus minimising disruption to residents, to businesses and to traffic.
It must be accepted that any work carried out within the confines of the highway will inevitably cause some disruption to the traffic using the roads. The problem experienced by the council is that, because of the restricted time that it is allowed to set up the circuit, it requires more men working and more disruption. It is hoped that, by spreading the period when the erection and the dismantling of the circuit can take place, the inconvenience to the road users and to the local residents—one must take into account their day-to-day problems—will be reduced dramatically. They will not therefore have to face the high pressure of the circuit engineer building the circuit with the consequent disruption that we have experienced.
Additionally, because of the time restriction, there is the cost of working through the night on many occasions, which is also disruptive to local residents. By extending the engineering days in such a way, the work can be carried out during the day, when the residents will not be inconvenienced by night-time noise and work.

Ms. Short: Is the hon. Gentleman aware that one Birmingham citizen, who I believe lived in his constituency, has died as a result of the barriers being erected in advance? It was the Birmingham coroner who called for changes to be considered when building barriers on the city's super prix route. Can the hon. Gentleman assure us that the fact that someone has died means that the coroner's remarks have been taken into account and that people's lives will not be put at risk in future?

Mr. King: The hon. Lady has probably given a clear indication why we are making some of our proposals. It has been disruptive to install the barriers in the way that we have because of the time restraints. That has required contractors in vehicles to occupy the highways and lift the ARMCO barrier into position in a way that we do not like. By spreading out the time available, one can have fewer people working for a longer period, which will have a less disruptive influence on traffic that is on the highway at the same time.
The hon. Lady has reminded us of the tragedy. How directly attributable that was to working on the super prix circuit—

Ms. Short: The coroner said that it was.

Mr. King: Then I bow to his thinking. I believe that our proposed changes to the Bill will reduce the incidence of any danger to the public. That is one of the driving elements behind the changes.

Ms. Short: Has the hon. Gentleman made up that answer on the spur of the moment, or does he really know that safety has been taken into account? It is a serious matter when a life has been taken and the coroner has said that it was due to the way that the roadworks were being carried out. The gentleman who died was Mr. Taylor, of Staple Lodge road, Northfield, so I presume that he was the hon. Gentleman's constituent.
Will the hon. Gentleman assure me that safety has been taken into account in reorganising the way in which the

barriers will be erected? If not, is he just saying that off the top of his head, without knowing whether safety has been properly considered?

Mr. King: The hon. Lady is right to be concerned. I say again that the entire exercise of extending the time in which engineering work will take place is designed to reduce the inconvenience to road users and to local people. Because we are reducing the inconvenience, that must imply that we are intending to do so in as safe and as efficient manner as we can.
One cannot guarantee that somebody will not have an accident because of work that is taking place. In all honesty, no one can say that. However, steps are taken and will be taken to minimise that possibility. I have no doubt that, as a result of what the coroner has said about that accident, the city engineers and those responsible for erecting the circuit will pay particular attention to ensuring that such an accident is not repeated. No one would want anybody to be the innocent victim of what is a strong social event and an entertaining spectacle.
Schedule 2 outlines police costs. The 1985 Act gave the West Midlands police full indemnity for their costs arising in connection with the race. That is unique, because the costs include the policing costs outside the sporting area as well as inside. The costs also include planning and the staffing of police headquarters. Birmingham city council has no influence over the level of policing, as that is an operational decision of the chief constable. As a consequence, extremely high costs have been carried by the city council—they have averaged much more than £100,000. The city council feels that that is unfair, as the figure represents about a quarter of the total police bill to football clubs for all matches played in the west midlands in one season.
One of the problems has been that, because of the stated requirements, some of the costs have been much higher than originally estimated way back in the early 1980s. During the three years of the event, however, the police have reported only a handful of incidents leading them to take action. The city council is currently discussing the matter with the police authority, and it hopes to reach agreement leading to an amendment being put to the Committee, should the Bill receive a Second Reading.
The city council would also like the House to consider the insurance costs. Section 20 of the 1985 Act establishes strict liability for personal injury or damage to property without proof of negligence. That is unusual, as negligence normally has to be proved. The consequence has been an extremely high insurance premium of around £200,000 a year. The council originally wanted to repeal this section of the 1985 Act, because experience of three years racing suggested that it was unjustified. However, it has noted the concern of local residents, businesses and hon. Members and it will put an amendment to the Committee to reinstate strict liability without proof of evidence for residents, spectators, businesses and statutory undertakers. That cover will not include drivers, their teams or associated personnel involved in the super prix, including the media. The latter will need to prove negligence. It is felt that, in any case, those in the latter category are well aware of the risks they take at this sport.
It is important to mention the accounting procedures that the city council has adopted over the years, given their importance to the perception of the super prix as a profitable operation. I am sure that other hon. Members


will also want to comment on this. The 1985 Act placed upon the city council the obligation to make a cumulative profit over five years in order to retain its powers to run motor racing. In addition, the Act obliged the city council to adopt commercial accountancy procedures rather than local government accountancy procedures. Section 14 of the 1985 Act refers to that and was inserted following objections to the Bill in 1985.
The city council was advised as to the proper presentation of its motor race accounts by its auditors. Because of the unusual nature of commercial accounts within a local government setting, the city council sought counsel's opinion on the presentation of the accounts. It has been guided by that advice. It was right for the city council to comply with the advice of its auditors.
The financial outcome is as follows. In the report to the general purposes committee of Birmingham city council on 3 October 1984, the city treasurer reported his estimates of costs and revenue for the motor race. The estimated costs ranged from £1·35 million to £1·8 million and the estimated income was £1·35 million. The treasurer concluded:
From a prudent financial viewpoint it is considered that the first motor racing event on the streets of the city may not generate large profits. It is anticipated that a similar position would result from the second or third events.… Whilst the promotional benefits of staging road races cannot be quantified it must be accepted that there is immense potential. It is thus suggested that, if a loss were to be made that it would be right to judge such as part of the overall costs of promotion and publicity of the city.
That was before the original Bill came to the House.
In 1986, the costs were £1,530,000; in 1987, they were £1,561,000; in 1988, the provisional costs—the accounts have not yet been audited—were £1,213,000. Those figures are within the estimates set. The income in 1986 was £898,000; in 1987 it was £1,122,000, and in 1988 it was £1,213,000—that figure may vary by £1,000 either way. In other words, the city lost money in years one and two but broke even last year. Those are the figures if one accepts or adopts local government accounting methods. If one considers those figures in the light of commercial accounting methods, as necessitated by the 1985 Act, they reveal that in 1986 the city lost £173,051; in 1987 it made a profit of £76,557 and in 1988 it made a profit of £565,494. The cumulative figure for the years to date shows that a profit of about £470,000 has been made. Those are the figures that the auditors have looked at and approved.
It is clear, judged by normal local government accounting conventions and commercial accounting conventions, that the race is profitable and will go forward from strength to strength. Other hon. Members may wish to argue the merits of the accounts or the way in which they have been drawn up, but those figures are subject to audit and the auditors are clear that the city has adopted the correct accountancy procedures and that the figures, as presented in the accounts, stand the test of examination.
My speech has been extended because of the interventions by many hon. Members. I thought it was right and proper to allow them to do so, as that avoids much repetition later on. Those interventions have also helped to clarify the issues and the concerns about which they are rightly worried.
I have pleasure in presenting the Bill to the House. I hope that all hon. Members will realise that the Bill comes from the people of Birmingham—from the local authority—with support from all sections of the political parties. It

illustrates the city's desire and determination to see the motor race prosper and to grab the opportunities that are available to ensure that the city maintains its dynamic drive towards future prosperity and competitiveness in this its 100th year.

Mr. Terry Davis: The hon. Member for Birmingham, Northfield (Mr. King) took 28 minutes of his speech to reach the Bill. During those first 28 minutes he described the economic benefits of running a motor race through the streets of Birmingham.
The hon. Gentleman does not seem to understand that the disagreement within the Labour party about this matter does not concern whether there are economic benefits, but how those economic benefits should be generated. I found it rather amusing that the hon. Gentleman, a Conservative Member, extolled the merits of public expenditure as a way of generating employment in Birmingham or elsewhere. The disagreement within the Labour party is not about whether there should be expenditure to generate jobs, but what sort of expenditure should generate what sort of jobs. The argument within the Labour party is about priorities. We believe that in deciding to spend money on the motor race—in subsidising a motor race—the city council has forgone the opportunity to spend money on social services, on education, on housing and on all the other activities for which people elect city councillors. Those services generate jobs as well as providing services for those in need.

Ms. Short: My hon. Friend is right that there are differences of view in the Labour party. Is he aware that a meeting of the Selly Oak local area sub-committee voted against the road race and that the Tory representatives voted against? There seem to be differences of opinion in all parties.

Mr. Davis: I was not aware of that and I am grateful to my hon. Friend for drawing that to our attention.
The hon. Member for Northfield briefly addressed the fact that when the 1985 Bill was introduced to the House of Commons by Sir Reginald Eyre, the House was told not only that we would derive all the economic benefits, described by the hon. Gentleman for 28 minutes, but that we would also receive a profit. We were told that the race would make a profit without anything being charged to the ratepayers and that that profit would in turn be used to improve social services, education and housing. It has not made a profit without a charge being made on the rates.

Mr. Denis Howell: It has.

Mr. Davis: If my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) disagrees, he will no doubt have an opportunity to catch your eye, Mr. Speaker, but, if he disagrees, I will certainly want to examine his figures after this debate.
There are two reasons for opposing this Bill. The first is the effect of the road race on the people who live near the circuit. There is no doubt in my mind, having talked to representatives of residents in that area, that there is a tremendous noise and disruption as a result of the road race. At the time of the 1985 Bill we were told that people living in the area welcomed the excitement, glamour and pleasure they would derive from watching a road race pass their front windows, and we were told there were surveys


which supported that. I did not disagree with that argument, but people living in the area have experienced three road races, and there is now evidence that many of them do not want the road race to continue and that even more of them are very concerned about the possibility of a bigger road race taking place—a formula 1 road race—for a period of four days.
It is not only the people who live in the area who have strong feelings about the disruption caused by the road race. People living further afield suffer a great deal of inconvenience in commuting to the city centre during the period of the road race during the road works before and after the race. I leave it to my hon. Friend the Member for Birmingham Ladywood (Ms. Short) and other hon. Members whose constituents are adversely affected to describe the effects of the road race in detail.
The problems people have at the moment will clearly be made worse by the proposals in this Bill, and I cannot advise the House to accept the assurances given by the hon. Member for Northfield, who is no doubt acting in good faith; so was Sir Reginald Eyre when he gave assurances to this House four years ago. Those assurances have not been kept.
For example, the hon. Member for Northfield said that we should extend the period of the works to 20 days, which would enable them to be done at less anti-social times, which will reduce the effect on people living in the area, but there is no guarantee that that will happen; it is not written into the Bill. The Bill gives the council the opportunity to do the road works over a period of 20 days at unsocial as well as other hours.
Similarly, the hon. Member says that the council would not want to have a road race for four days unless it were formula 1 rather than formula 3. Again, that is not guaranteed in the Bill. Indeed, when I intervened in his speech and asked him to confirm whether it was possible under a clause in this Bill to have a formula 3 or super prix race over a period of four days on any weekend between the beginning of May and the end of September, he said that it was. In the previous Bill, which became an Act, we were assured that the super prix would take place only on one of three weekends; it would have to be a bank holiday weekend, over Sunday and bank holiday Monday, on one of the two bank holiday weekends in May or the one in August.
However, this Bill gives the council the opportunity to have a race for four days on any weekend between May and August, and there is no guarantee that the council will not take this opportunity and will not operate like the moneylender in "The Merchant of Venice" and demand its pound of flesh because it is entitled to it under the terms of this Bill. I am not prepared to accept the hon. Member's assurances, although I am sure that he gives them in good faith.
This Bill would also enable the council to close the streets from 6 am to 8 pm instead of the present shorter period. The Bill would enable it to refuse to idemnify the costs of the police authority. In such a week, after last Saturday's tragedy, I am amazed that anybody can argue in this House about the level of policing which the police force judge to be appropriate for any sporting event or that anyone wants to refuse to pay for that policing. As it

stands, the Bill would also enable the council to escape its strict liability obligations, which were included in the previous Act.
I cannot accept the hon. Gentleman's assurances, which brings me to the second reason for opposing this Bill—we have had assurances before. We had clear and explicit assurances four years ago. I refer to the financial arrangements for the road race, the assurances given then by the city council to this House, and the assurances given in this House by Sir Reginald Eyre on behalf of the city council; assurances incorporated, as we were told, into the Bill which became the 1985 Act; assurances which in my opinion have now been broken.
These assurances took two forms. The first was that if the council were allowed to use £.1·5 million of its capital allocation to pay for the capital expenditure required for the road race—an allocation from the Government intended to pay for repairs to council houses—the money would be recovered over a period of five years from the income generated by the road race and that the money would be recycled to pay for those repairs. That assurance was not only given in this House but was confirmed in a letter to me from the leader of the city council dated 21 June 1985. When I discussed the wording of the Bill with the representative of the city treasurer's department or the city solicitor's department, Mr. Allport, I was promised that the assurance would be given effect. That was one of the reasons why I dropped my objections to the Bill at the time.
Subsequently, I had correspondence with the city solicitor about this matter and was told that the capital expenditure on essential services would be financed by the road race. That assurance has not been kept. When I raised this point with Councillor John Charlton, the chairman of the general purposes committee, a few months ago, he told me that the promise had been kept and referred me to the city treasurer. I took up that invitation and had a very frank discussion with the city treasurer. I was told by him that he had had to find £1·5 million to honour the assurance given to this House, but he did not find it in the money generated by the road race; it was money made available to the city council for other reasons.

Mr. Denis Howell: indicated dissent.

Mr. Davis: My right hon. Friend the Member for Small Heath shakes his head, but Mr. Bernard Farrar, the city treasurer, explained this to me in careful detail. The £1·5 million came not from the road race but from the Severn-Trent water authority, and that money was used to pay for council house repairs. When I put it to the city treasurer that that was all very well but that it was still open to the city council to increase the money spent on repairing council houses by that £1·5 million as well as 1·5 million re-cycled from the income of the road race, he had to admit that that was correct. We were promised that the money would come from the road race over a period of five years, and that promise has not been kept. I repeat that it is not being kept for the benefit of my right hon. Friend the Member for Small Heath who keeps intervening from a sedentary position.

Mr. Denis Howell: The purpose of this interruption is to point out that the hon. Gentleman said this has to be done over five years. I accept what he says, but the race has been on for only three years.

Mr. Davis: It is not the intention of the city council.

Mr. Howell: Oh, yes it is.

Mr. Davis: I have here a letter dated 30 January, from Councillor John Charlton, chairman of the general purposes committee, who is claiming that the assurance has been kept, not that it will be kept in the future, and it was he who referred me to the city treasurer. When I spoke to the city treasurer, he explained to me what had happened and that it was not money from the road race and would not be from the road race. So that assurance, in my judgment, has not been kept, and the city treasurer was kind enough to say that he understood my view.
The second assurance which has not been kept is that the road race would not be subsidised by the ratepayers of Birmingham. In other words, we were told that the road race would make a profit, not a loss, so there would not be any question of money being spent on the road race instead of on repairs to houses and schools, on employing more teachers' home helps and occupational therapists, or on adaptation's to the homes of people with disabilities. We were told that none of those things would take second place to the road race and that money would not be spent on the road race rather than on those vital services for the people of Birmingham. We were told that profit would provide money for increased expenditure on all those things.

Mr. Howell: Quite right.

Mr. Davis: My right hon. Friend's memory is correct. That is what we were promised. We were told that the profit would be used to improve services for the people of Birmingham. We were specifically told that if the road race did not make a cumulative profit for the first five years, it would not be held again. The council was so confident that it said that the race would not be held then in spite of all the other benefits described by the hon. Member for Northfield. That assurance has not been kept.
The assurances were given at a very early stage in our discussions on the Bill which became the Birmingham City Council Act 1985. The city council issued a document in January 1985 which stated:
The view from the consultants is that a profit of at least £1 million would be made on the first event, with even larger profits in the future.….The most pessimistic view is that in the short term, income and expenses will break even. No charge will fall on the rates.
That document was followed by an advertisement which appeared in The House Magazine on 25 January 1985 which stated succinctly under the headline "Birmingham ratepayers won't be paying for it":
The cost to the ratepayers of Birmingham? Absolutely nothing. Indeed it will be to their benefit as more cash will be brought into the authority's kitty.

Mr. Howell: Quite right.

Mr. Davis: I hope that my right hon. Friend will continue to follow my argument.
Another document was issued which stated:
The race will make money for the city council so the ratepayer will not lose out. We will not be taking decisions on whether to repair leaking roofs or to support the race. The road race will bring more cash into the authority's kitty.
The then chairman of the general purposes committee wrote a letter in which she said:
the support given to the motor race will not reduce the amount of resources available for other purposes. In fact, in a profit situation, the funds available for these purposes will

actually increase and of course it is our hope that besides promoting the city and encouraging tourism, the racing will generate income which we can use on community and social services.
That was backed up by another letter from the then city treasurer, Mr. Paul Sabin, who referred first to capital expenditure, and who said:
It can be regarded as good value for money in the sense that it will generate income from the motor race which will improve the city's revenue position and thereby free resources to be spent on other services. In the long run, housing, education etc. could well benefit significantly from the motor race … Since we envisage the motor race at worst breaking even in revenue or year-to-year operating terms, and probably generating significant income, there is no question of revenue resources being diverted from other spending areas … There is no conflict of priorities … It would not take long for annual benefits to cancel out the initial capital contribution and therefore should perhaps be seen as a major financial factor in this debate.
When the Birmingham City Council Bill was introduced in March 1985, a circular was sent to some hon. Members which stated:
The race will make money for the city council and will not therefore be a burden on the ratepayers.

Mr. Denis Howell: Quite right.

Mr. Davis: My hon. Friend is still with me. I hope that he will continue to be with me.
The Birmingham City Council Bill had its Second Reading on 1 April 1985. Sir Reginald Eyre said:
Since the city envisages the motor race at worst breaking even in revenue on year-to-year operating terms, and probably generating significant income, there is no question of revenue resources being diverted from other spending areas … It is the hope of the city council, based on careful study of all the factors involved, that besides promoting the city and encouraging tourism"—
I emphasise those words, "besides promoting the city and encouraging tourism"—
the motor racing will generate income and so extra resources for the city."—[Official Report, 1 April 1985; Vol. 76, c. 962–63.]
My colleagues and I continued to have some scepticism about those claims and we regarded them as being exaggerated. Nevertheless, the Bill received its Second Reading and went into Committee. In Committee, questions were raised about the financial arrangements For the race. An hon. Member for Manchester is recorded as asking who would be responsible for any financial loss resulting from the ratepayers. A representative of the city council in the presence of the agents Sharpe, Pritchard and Company, the same agents for this Bill, answered:
It was not thought likely, however: expert analysis projected a £1 million profit on a £1·5 million outlay not including the spin-off from tourism.
Many of my hon. Friends subsequently received a letter from the leader of the city council, who wrote:
As far as I am concerned, however, to keep running a road race at a loss is not on. We will therefore bring in an amendment in the Lords to provide that the race shall not take place if an operating loss is still made in the fifth year of the event.
That letter was sent by Councillor Dick Knowles on 21 June 1985.
On 24 June, Sir Reginald Eyre said in the House:
In principle, a requirement that the race would not continue—that is, that the powers to operate the race would cease—if the event could not be staged without incurring annual losses, is accepted. The city council would not want to continue running the race if it had to require support from the ratepayers each year … The intention is to introduce an


amendment in another place to deal fully with the principle of the new clause … I am giving an undertaking of equivalent value"—
that is, equivalent value to a new clause or amendment, which had been tabled by my hon. Friend the Member for Ladywood. Sir Reginald Eyre said:
I am giving an undertaking of equivalent value in that such an amendment will be introduced in another place. I give that undertaking on behalf of the city council.
When pressed by my hon. Friend the Member for Ladywood, he said:
I have given an undertaking without reservation on behalf of Birmingham city coucil."—[Official Report, 24 June 1985; Vol. 81 columns 712–13.]
The intentions of Sir Reginald Eyre and the city council were clear: the race would generate a profit and would not require any subvention from the rate fund.
On 4 July, we resumed the Report stage of the Birmingham City Council Bill. In the meantime, there had been private discussions between myself on behalf of my hon. Friends and Sir Reginald Eyre in the presence of other council representatives. Sir Reginald Eyre was very forthcoming and he accepted the strength of feelings of myself and my hon. Friends. He assured me that it was not the intention to run the race at a loss, that the council would stop it after five years if there was a cumulative loss, and that there would be no subsidy from the rates on any grounds. I accepted in good faith what Sir Reginald Eyre told me and I advised my hon. Friends to drop their objections to the 1985 Bill. My hon. Friends accepted that I was also acting in good faith, and we agreed that we could trust Sir Reginald Eyre's assurances. A new clause was tabled by him to give effect to the assurances that he had given to me and my hon. Friends.
New clause 3, which was brought before the House on 14 July 1985, became section 14 of the Act. Subsection 5 says:
If the statements for the first five financial years in which the council provide motor races show a cumulative deficit, the power to provide motor races shall cease to be exercisable by the council.
Sir Reginald Eyre, explaining the purpose of that new clause, said:
New clause 3 is designed to meet the points that were made in the earlier debates. This provision meets my undertaking that if the revenue accounts for the first five financial years in which the council provides motor races show a cumulative deficit, the power to provide motor races shall cease to be exercisable by the council."—[Official Report, 4 July 1985; Vol. 82, c. 577.]
On that basis, my hon. Friends and I allowed the Bill to become an Act of Parliament, and the city council issued this community bulletin:
In spite of what has been suggested by the few critics of the race proposals, it will not cost the ratepayers anything.
In fact, financial analysts have projected that, far from costing money, the event will put much-needed profits into the city's kitty, and this means more to spend on the services we all need.
Those are not my words; they are the words of the city council. That is what the council said would happen; that is what it said was built into the Bill; that is the assurance that it gave.
Unfortunately, the first race was held in 1986, and it made a loss. The second race was held in 1987, and it made a loss. In February 1988, the city council was faced with the problem of having to meet the assurances that it had given to this House, as expressed in section 14 of the Act.

Ms. Short: My hon. Friend is telling his story very well. We all lived through this. There has been a great deal of talk about the way in which the accounts were kept. Can my hon. Friend confirm that implementaton of the provisions in the Act about the way in which the accounts should be presented is entirely a matter for the city council? Is it not a fact that the council chose that way of recording the accounts, and did not have it imposed by others?

Mr. Davis: My hon. Friend is absolutely correct. I do not propose to go into detail about my discussions with Sir Reginald Eyre. I took him as representing the city council. After all, he sponsored the Bill in this House. I had known him for several years in his role as a member of the Conservative party. I disagreed with him about many political issues, but I would never have questioned his integrity or his good faith. I believed what he was telling me, indeed, I believe that he believed what he was telling me—that there would not be any cost to the ratepayers of Birmingham if the race were to go ahead and if, at the end of five years, there were to be a cumulative deficit, the race would not be held again.
In February 1988 the city council officers found that they had a problem. They had a loss of nearly £600,000 from the race in 1986, and a loss of about £400,000 in 1987, and they had trouble with the auditors. The auditors came to look at the road race accounts, and found that some items that should have been included in those accounts had not been included. I refer to items such as hospitality for VIPs, which had been charged to other accounts. The council argued that that expenditure had been incurred under provisions of other legislation and that therefore there was no need to show it as a cost against the road race. The auditors said that that was not right and that the council must put the expenditure into the road race account.
The auditors also told the council that it must include depreciation. I have some sympathy for the council on that. It is a detailed point, and the city council made a great issue of it in discussions with my hon. Friends and myself. Actually, the figures show that the amounts included for depreciation are nothing like the total of the losses.
There is some dispute about what happened at the meeting with the auditors. Certainly, it is clear to me that the suggestion came from that meeting that the council should consider putting a sum of money into the road race account for the benefit of promoting tourism in the city. It is not clear who made that suggestion. It was based on the preamble of the Act, which says:
The city is a major commercial and industrial centre and, with a view to promoting the city and encouraging tourism and attracting business, it is expedient that the council be authorised to provide or arrange for the provision of motor races on certain streets in the city.
I emphasise that those words were in the preamble from the very beginning. At no stage was it suggested that those words justified a credit to the road race account from the rates account. At no time was that suggested, by Sir Reginald Eyre or anybody else, and it was never thought of until the meeting took place nearly two years after the first road race had been held.

Mr. Rooker: My hon. Friend is making a useful and a very important point. It is one that has to be put on the record for the benefit of all hon. Members and for


everyone else who may read the report of this debate. The preamble to a private Bill is not the same as the preamble to a public Bill. Most of us do not bother with preambles. Until this issue arose, until I saw what happened last October, I never knew that the preamble was amendable. I never dreamt that anything from section 1 of an Act had the legal force to rub out sections.
This is a valuable point that my hon. Friend is making. The preamble to this Act runs to eight paragraphs of crucial importance. At that time, I had 12 years' experience in this House. I freely admit that, despite that experience, I had never seen anyone attempt to amend a preamble. I had never heard a preamble debated, or seen anyone rest a case on a preamble. Hon. Members concern themselves only with clauses and scheules to Bills—later, sections and schedules to the Acts.
My hon. Friend is giving all hon. Members a warning. We all make law, though we are not all lawyers. This is a warning about the importance of the preambles to Bills, whether private or public. Generally speaking, this problem arises in the case of private Bills because the preambles to such Bills are much longer, much more full of information, than the preambles to public Bills.

Mr. Davis: I am grateful to my hon. Friend.
Before giving way, I had reached the question of the meeting with the city auditors, Price Waterhouse. It is absolutely clear—there is no question—that nobody had suggested before 1988 that there should be a credit to the road race account from the rates account on the ground of that preamble. There is some confusion about whose idea it was at that meeting with the city auditors. Councillor John Charlton, chairman of the general purposes committee, has told my hon. Friends and myself that the suggestion came from the auditors themselves. Well, I put that to Price Waterhouse, and they disclaim all credit—or rather odium—for the suggestion. I do not think that we shall ever find out where the idea came from, but what we can be clear about is the motive for it.

Mr. Roger King: Perhaps I can help the hon. Member in trying to establish where this solution came from. It came from Price Waterhouse themselves. I have here a copy of a letter, dated 12 April 1989, to the hon. Gentleman. It says:
Accordingly, when the first road race accounts were being compiled we took notice of the requirements of the 1985 Act and, in particular, those set out in section 14. My staff quite properly, and as part of normal procedure, questioned whether the accounts were drawn up correctly and if all amounts of expenditure and income had been included … In addition, on a point of principle, my staff questioned whether, in accounting terms, the road race account should reflect income for sponsorship from the city.
It seems to me quite clear that the auditors actually pointed this out when they were auditing the first road race accounts.

Mr. Davis: I am very sorry that the hon. Gentleman has chosen to quote the letter to me from Price Waterhouse. He forces me to refer to the correspondence in some detail. On 11 April I wrote to Price Waterhouse in these terms —[Interruption.] The hon. Gentleman and his hon. Friends may be disappointed that I am going to refer to all this correspondence, but it is he, not I, who has quoted from it. This is the letter that I sent to Price Waterhouse:
I understand that you were responsible for suggesting that the city council should avoid the intention of section 14 of the 1985 Act by using the preamble as authority for

crediting the 1986–87 and the 1987–88 road race accounts with a total of £1,050,000, and I should be grateful if you will confirm this point because I want to refer to it during the debate in the House of Commons on the Birmingham City Council (No. 2) Bill.
The hon. Member for Northfield quoted from Price Waterhouse's reply, but he did not read the whole of it. He missed out the preceding paragraph which said:
The statement set out in your letter is not correct.
I was asking Price Waterhouse whether it was responsible and it said that it was not. I wrote a long letter back in which I said:
I repeat that I have been told that a credit for promotional value was suggested by Price Waterhouse, and that the idea of a credit based on a preamble to the 1985 Act was not initiated by the city council.
Today I received a message which was taken down in shorthand from Mr. Walls of Price Waterhouse in which he said:
On the matter of the road race there are several things that I might have said to Mr. Davis personally, but I do not have a lot to add to my letter of 12 April. Mr. Davis must understand that Price Waterhouse give advice to the city as well as audit the city as they do with all their clients. I am pretty certain that I did not suggest, as he has put several times in his letters, that the preamble of the 1985 Act should be used to justify this credit to the road race account.
The hon. Member for Northfield has just suggested that Price Waterhouse accepted responsibility. Mr. Walls of Price Waterhouse dictated that message today. He said:
I am pretty certain that I did not suggest, as he has put several times in his letters, that the preamble of the 1985 Act should be used to justify this credit to the road race account.
Wherever the responsibility lies, the important thing is that the city solicitor then sought advice from Queen's counsel. I have looked at the instructions that were given to the Queen's counsel by the city solicitor. He left Queen's counsel in no doubt whatever about the purpose behind this suggestion of a credit to the road race account on the ground that the road race had promoted tourism on the basis of the preamble to the 1985 Act.
That was not the only suggestion. The city council also asked for the advice of Queen's council on the possibility of increasing the grant which the city council gives to the Birmingham convention and visitor bureau in the confident expectation—the bureau's chairman is a leading city councillor—that the bureau would then give a grant to the road race. If that is not creative accounting, I do not know what is. Even the city solicitor—especially the city solicitor—had some qualms about that.
The city solicitor makes it quite clear in his instructions to counsel that
If such an arrangement were possible it would sidestep the thinking behind section 14 of the Act which was to prevent the council subsidising a loss-making motor race indefinitely.
That was the motivation. It was to sidestep an Act of Parliament. That is what the council officers and senior members of the city council were doing. They knew that they had given an assurance that if the race made a loss, they would stop it after five years. They were looking for a way of sidestepping section 14—their own new clause, drafted, as my hon. Friend the Member for Ladywod has said, by their lawyers, not by us, and supposedly given in good faith to be honoured by the city council.
After all the discussions had taken place, the city council transferred £500,000 to the road race account for the 1986 race and £550,000 for the 1987 race.
It has been said that there is no difference between the city council choosing to spend money on the road race to promote tourism and choosing to spend it in some other


way to promote tourism. I understand that point. If the city council had decided to spend money on promoting tourism and believed that the road race was a good vehicle for doing so rather than books of matches, posters or newspaper advertisements, I might have had some sympathy with its point of view, but that was not what happened.
The city council had overspent on the promotion of tourism in the financial year 1986–87. It did not transfer money from the promotion of tourism account to the road race account; it just reclassified the deficit. It simply said that instead of overspending by a few thousand pounds on the promotion of tourism, it would overspend by that, plus another £500,000. It was a fiddle. To my constituents it looks like cheating. It was not a case of using money; the council just reclassified the loss in the accounts. It was a book-keeping manoeuvre, and it was not in the spirit of negotiations undertaken by Sir Reginald Eyre.
At that stage, the city council had not done its accounts for 1987–88. When they were published, we found that it had overspent in that year as well. Now we have the probable figures for promoting tourism for 1988–89 and we find that compared with its original estimate the council has overspent by £500,000. But it is worse than I thought because the council has transferred £600,000 to the road race account. For the current year 1989–90, the council has estimated for another subvention to the road race account of another £600,000. This is a bottomless pit. The council overspent on the promotion of tourism in 1986–87, 1987–88 and 1988–89 and it has now increased its estimate for 1989–90 in order to hide the subsidy.
To be fair, the city treasurer assures me that he will transfer some of the money back. He will transfer back not £600,000, but £550,000, having ensured that the race makes a profit of that amount. He is hoping to do the same next year.
It is not only Socialists who have questioned the way that this is being done. At the statutory consultation meeting with representatives of industrial and commercial ratepayers about this year's budget—in particular, representatives of the Birmingham chamber of commerce—they were told that the race was making a profit. I do not accept that.
My right hon. Friend the Member for Small Heath says that he is sure that it did, but on the basis of my discussions with the city treasurer I am convinced that, in the spirit of the undertaking given by Sir Reginald Eyre, the race has made a loss in excess of £1 million and there will be provision for further transfers in the current year.
It took the hon. Member for Northfield 54 minutes to get to that point, which he well knows is the objection that I and my hon. Friends have to the road race and the new Bill. The hon. Gentleman said that it was the proper thing to do. I do not agree. It is not proper to look for ways to sidestep an Act of Parliament when the city council is itself responsible for the wording of the Act of Parliament. The council could do it, but it did not have to do it. It was a policy decision to do it. It was legal, but it was not right, and it should not have done it.
It would not matter so much if the money put int,o the road race account had been surplus. It would not matter so much if Birmingham had no financial problems. But every Member of Parliament and city councillor from

Birmingham knows that Birmingham has tremendous financial problems as the result of the Government's financial policies. Council houses are not being repaired. Houses in my constituency stood empty throughout March because the local housing department did not have the money to repair them, and people could not move into them. Schools are waiting to be repaired. Roofs are leaking in nursery, infant, junior and secondary schools in my constituency. There is a shortage of occupational therapists. People with severe disabilities are classed by their doctors as in need of having their homes adapted. Such people are waiting not weeks but months to be visited by an occupational therapist, and even longer for the adaptations that are required.
In August last year the city council stopped issuing bus passes to people with disabilities because it had run out of money. In fact, the city council had not issued any bus passes to people with disabilities, who had been assessed from April 1988 as entitled to them. It had taken the council from April to August to deal with the backlog from the previous year because it had run out of money that year as well—when it was subsidising a motor race.
I challenge the order of priorities of the city council. I accept that a motor race creates jobs. The point is that all the other things that I mentioned would also create jobs. If money is spent on repairs to council houses, on occupational therapists, or on repairing the leaking roofs of schools, jobs are created. If bus passes are provided for people with disabilities, that provides jobs for bus drivers. The question is: what are the council's priorities?
It is significant that the 1985 Act was introduced by a Conservative Member of Parliament, and that this Bill has been introduced by another Conservative. The priorities are Conservative priorities; they are not Socialist priorities. That is why I will vote against the Bill.

The Minister for Roads and Traffic (Mr. Peter Bottomley): It may be helpful to the House if I intervene at this point to give a brief indication of the Government's view on the Bill. As the House knows, the Government traditionally stand neutral in relation to private Bills where no major matter of principle is involved. That was our position on the 1985 Act, which authorised motor racing on the streets of Birmingham for the first time.
The Bill now before the House proposes some significant amendments to the 1985 Act. These particularly concern the number of days on which motor racing can take place and the length of time for which streets can be closed to traffic each day. Understandably, the Bill has aroused opposition from those who fear an increase in the disruption that motor racing must inevitably cause to the normal pattern of daily life and movement in Birmingham. Questions have been raised about the way in which the city council has financed the races held so far.
We have considered whether these are major matters of principle on which it would be right for the Goverment to take a view. We have taken into account the fact that none of the roads directly affected by the Bill's proposals is a trunk road. Birmingham city council is itself the highway authority for all the roads concerned. Our conclusion is that the issues raised by the Bill are essentially of local concern and that it would not be right for the Government to intervene. In the light of that, we have no comment on the instruction.

Mr. Rooker: rose—

Mr. Bottomley: I will not give way.

Mr. Rooker: Why will the Minister not give way?

Mr. Bottomley: It is for the promoters to persuade Parliament that the powers that they are seeking are justified.

Mr. Rooker: rose—

Mr. Bottomley: There are now eight petitions—[HON. MEMBERS: "Give way."]—remaining against the Bill.

Mr. Rooker: On a point of order, Mr. Deputy Speaker. on 1 April 1985 the Minister's predecessor, the right hon. Member for Wallasey (Mrs. Chalker), was more than generous in giving way to her colleagues in the House when she said:
We have stated that we expect the project to be self-financing".—[Official Report, 1 April 1985; vol. 76, c. 980.]
That is what she said on behalf of the Government. What about the Minister—

Mr. Deputy Speaker (Sir Paul Dean): Order. This must be a matter for the Minister.

Mr. Bottomley: Intemperance from the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is out of place.
There are now eight petitions remaining against the Bill which raise matters reflecting genuine and widespread local concern. The petitioners will have the opportunity to present their objections to the Select Committee, which will be in a better position than the House today to examine in detail the issues involved and will have the added advantage of hearing expert evidence. In the usual, conventional way, the Bill should be allowed to proceed to Committee for that detailed consideration.

Mr. Denis Howell: I am an unashamedly enthusiastic supporter of municipal Socialism and I am in favour of municipal enterprise. I find it extremely ironic that my lifelong principles are being supported from the Government Benches and opposed from the Opposition Benches, but those of us who have served a long time in the House are never surprised at anything these days. I do not often fall out with my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), but even if everything that has been said about the subsidy for the race were correct—in fact, it is wholly inaccurate—I should still think the road race worth while, and I am sorry that my hon. Friend seeks to oppose the strategy of Birmingham city council.
The Government's policies have brought enormous unemployment to Birmingham. I believe that my constituency has the third highest level of unemployment in the country—with long-term unemployment at 40 per cent., including much youth unemployment. It was for that reason that I decided, with the support of my hon. Friend the Member for Hodge Hill and others, to take on the job of promoting the Birmingham Olympic bid. Sir Reginald Eyre was also active in supporting that bid. The philosophy behind the bid was that because the Government would not solve the unemployment problems of Birmingham, we had better do something about them

ourselves. The only way to produce long-term economic benefits was to sell the wonderful city of Birmingham worldwide and to attract enormous worldwide investment.
That was nothing new. That logic started with the national exhibition centre. Some of the arguments that we have heard today from my hon. Friend the Member for Hodge Hill are an echo of the arguments about the establishment of the national exhibition centre. There was an all-party effort, supported by the chamber of commerce, to get the NEC built at Birmingham. Despite all the Jeremiahs telling us that the NEC would lose money, it is profitable. I believe that about £12 million of profit now goes directly to the rate fund each year. Of course, the NEC did not make a profit in the first year or two, but it gradually gathered support—it has to be sold worldwide—and the profit that it makes now goes towards expenditure on all the things that my hon. Friend the Member for Hodge Hill rightly demands, such as education, housing and other services.
That led us to thinking in other directions. Some hon. Members will remember the tremendous fight about the NEC. We had a great success against the London lobby. I remember going to see the Prime Minister with my hon. Friend's predecessor, who did one or two things of which I approve, although leaving the Labour party was not one of them. When he was a more senior Minister than I, we went to see the Prime Minister and told him that regional policy and the attraction of investment to the midlands would mean nothing if he did not agree to the NEC being put in Birmingham. It is to the credit of the Prime Minister of the time, now Lord Wilson, that in our presence he signed a piece of paper saying, "proceed."
The concept of the NEC came from the city council, and particularly from two late friends of ours, Sir Frank Griffin and Harry Watton. In spite of initial losses and quite a lot of risk, the NEC is producing a profit of about £12 million a year which subsidises the rates.
That is why I support municipal Socialism. When I was a member of the city council I was the chairman of the civic catering committee. We had to compete with the catering trade on more than fair terms because we had to pay considerably more each week in wages. Nevertheless, we made a success of it.
I have always believed in municipal enterprise and I am saddened by the doubts that my hon. Friends have expressed about that concept. The great city of Birmingham has been built up on municipal enterprise. Chamberlain produced water, electricity and gas—yet the Conservatives first nationalised them and the present terrible Government are privatising them. All that enterprise came from Birmingham. Those are the ironies of history that we must remember. Birmingham is a city based on municipal enterprise. That is why the NEC has been successful. It is also why we are promoting the Olympic bid. We went all over the world and attracted great attention.

Ms. Short: It failed.

Mr. Howell: It did not fail. We just did not secure sufficient votes to get it on the last occasion. It is clear that my hon. Friend does not appreciate that the Olympic bid is responsible for massive investment in the city of Birmingham. There are people building hotels now in Birmingham and wanting to establish businesses there


who say frankly to me, "Until we saw you going round the world selling your city, we were unaware of the city's attractions." Efforts of that type are cumulative.

Mr. Bob Clay: I was wondering whether the city had an economic development department. It seems odd that one has to have Olympic bids. After all, we cannot all do that. Perhaps Sunderland should have an Olympic bid if my right hon. Friend thinks that that is the only way to get investment.

Mr. Howell: I wish that we could have more intelligent interruptions. It should be obvious that our Olympic bid is just one of many ways to go about achieving the object that we had in mind. Other cities will adopt different methods. Sheffield is going for the world student games—and good luck to that city in its efforts.

Mr. Rooker: Sheffield is not going for them—it has got them.

Mr. Howell: That city will promote them. Perhaps we can now have some sense in this debate.

Mr. Michael Jack: The right hon. Gentleman referred to municipal Socialism. Perhaps for the same virtues that he claimed for that argument, he will acknowledge that Budapest in Hungary and Moscow bid for grand prix to attract attention to their respective cities.

Mr. Howell: I am grateful to the hon. Gentleman for reminding me of that. Perhaps I should declare an interest in that I have been to the Budapest grand prix and seen the effect that it has had on that country. It has been enormously successful, and all credit to the organisers.
While on the subject of declaring interests, I have been to the Birmingham road race, but not as a guest of Birmingham city council. I hope that that satisfies my hon. Friend the Member for Perry Barr. I saw many of his councillors in the hospitality suite, but I am glad to say that I did not have a drink there. I do not think that my hon. Friend had a drink there either.

Mr. Rooker: My right hon. Friend is making disparaging remarks about members of the city council.

Mr. Howell: I am not.

Mr. Rooker: By referring to it in a perjorative way—[Interruption.] I am simply saying that we are making law. There are beneficial interests involved in the result of this legislation. They have been enjoyed by some hon. Members, who no doubt will enjoy them in the future. The point of my earlier argument was that we should make it clear to the ratepayers of Birmingham, who pay for the free tickets, that they should know that we know that, and that when we are making law we should say, "Thank you very much—the hospitality and free tickets are fine." There was nothing disparaging in what I said. I assure my right hon. Friend that the city councillors are a totally different kettle of fish.

Mr. Howell: There is nothing disparaging about accepting hospitality.

Mr. Rooker: It was the way in which my right hon. Friend expressed himself.

Mr. Howell: I was simply drawing attention to the fact that people were enjoying hospitality. My hon. Friend interrupted me as I was about to say that there was nothing wrong with that. It is sensible and reasonable to do it, and it happens to all of us from time to time. I mentioned it only because my hon. Friend asked us all to declare our interests. I was declaring mine.

Ms. Short: As my right hon. Friend was chair of the Birmingham catering committee, he will be aware that that department is now going through a redundancy exercise. Is he further aware that that department contributed £28,000 to free hospitality—free booze and food—for VIPs? I thought that that was wrong. Did my right hon. Friend think that it was wrong?

Mr. Howell: I was not aware of it, and I doubt whether it is accurate.

Ms. Short: I have the figures with me.

Mr. Howell: I accept that my hon. Friend has the figures, but I do not know whether the catering department, of its own volition, was providing the hospitality or whether it was performing a service.

Ms. Short: It did it of its own volition.

Mr. Howell: In that case, it was not providing it[Interruption.] It may have spent £28,000 on food, drink and so on, but it must have been doing it as part of a service that it was paid to provide. I assume that that was the position. Catering departments are paid to provide services as the basis of their existence, but I will gladly look at the figures that my hon. Friend says that she has.

Mr. Rooker: It gets an income.

Mr. Howell: Yes, the department gets an income, which derives from various sources. I would be ruled out of order if I were to reflect on where we got the income when I was chairman of the catering department. It came from a variety of sources. By law it must make a profit, and it always managed to do that when I was chairman.

Mr. Terry Davis: I am sure that my right hon. Friend is anxious to have the correct figures. My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) may inadvertently have underestimated the amount charged for hospitality. Price Waterhouse insisted that the city council include in its road race account an amount for 1986 of £45,515 for hospitality for guests, a sum that had previously been charged elsewhere in the council's accounts. In other words, the city treasurer wanted to charge it somewhere else and Price Waterhouse insisted that that would not be right.

Mr. Howell: I am glad that was the position because it enabled my hon. Friend to make that intervention.

Mr. Davis: Really!

Mr. Rooker: What is £45,000, anyway?

Mr. Howell: I will not be sidetracked by my hon. Friends.

Mr. Rooker: What about the teachers?

Mr. Howell: This has nothing to do with teachers, as my hon. Friend knows. I will come shortly to the main points that he and other hon. Members made. I wish to move


from the attractions of the Olympic bid to the question of the national indoor stadium which we are about to build in Birmingham.
I have not the slightest doubt at all that in the case of the national indoor stadium—this country does not have one—there will be a lot of objectors, but again, it is a piece of municipal enterprise which is in the interests of the nation. We hope that it will make a profit. Nobody can guarantee at the moment that it will, but it will do so if it is properly run, like the new national convention centre with 10 halls that we are also building, including hall number two—

Ms. Clare Short: And the costs are overshooting year by year.

Mr. Howell: It is a good thing. Does my hon. Friend the Member for Ladywood not want to attract people to Birmingham? Does she not want to get business into the city? Does she not want to do anything for the people of Birmingham?

Ms. Short: Certainly I do.

Mr. Terry Davis: What does this have to do with the road race?

Mr. Howell: It has everything to do with the road race. It is all part of the same strategy: that is my whole point. We are selling Birmingham worldwide by these wonderful concepts. I am sorry that my hon. Friends cannot be big enough, even if they disagree, to understand the underlying philosophy that is supported by the people of Birmingham. We have had figures to show whether the people were behind it. The city conducted another survey after two road races and there is still a majority in the area concerned in favour of the road race. That was shown by the public opinion exercise conducted this year.
This leads me to another point. I respect the right of all my hon. Friends to criticise the Bill, but I believe that the local electors are best left to choose local councillors to run the city. I am glad to say that, in the two years that the road race has been run, the electors of Birmingham have held faith with the Labour group in Birmingham. I am sorry that my hon. Friends are rather more contemptuous of that local democracy than I would wish.

Mr. Rooker: Of course there is a split. My right hon. Friend is quite right that local people are the people to elect the local authority, and the local authority is best placed in all circumstances to govern the area concerned from a strategic and technical point of view. But that does not give the local authority the right to come to Parliament and demand that we rubber-stamp its legislation. That is the point that my right hon. Friend has not taken on board. Nor has it a right to breach undertakings given in this place in good faith and accepted in good faith. No authority whether it be our local authority or any other, has the right to expect that of the House. If my right hon. Friend is not seized of that point he is not really entering into the debate that is going on here at the moment.

Mr. Howell: I am very seized of the point and I am coming to it very shortly. I do not know why I keep on giving way, but I try to be courteous.
I was concluding my opening argument about the philosophy and strategy on which Birmingham's enterprise is based. I had conceded that my hon. Friend the member for Perry Barr and anybody else was entitled to

question the Bill, but I object to my hon. Friends objecting to the Bill in a way which suggests that their wisdom on these matters is superior to that of the elected representatives. That is what is happening—my hon. Friends are saying that, so far as the Bill is concerned, they know better than the Labour councillors in Birmingham.

Mr. Rooker: Who are split.

Mr. Howell: They may be split. We are split, too. If I may say so with great respect, my hon. Friend must not talk of politics in those rather juvenile terms. We are always split. I am against uniformity. The council was split when I was on it. The Labour group was split then, and we are split here. The Labour party is split. If we were not, half my hon. Friends would not be sitting here.
We must have regard to the facts of life. Of course we have different points of view, but I am entitled to put my point of view, which is that I am very sorry that in opposing the Bill my hon. Friends are not doing so entirely on the principles of the Bill but rather in the belief that their wisdom is superior to that of the elected members of the city council.

Ms. Short: That is absolutely wrong.

Mr. Howell: That is my interpretation of what my hon. Friends are doing.

Mr. Rooker: What about the arithmetic?

Mr. Howell: I will move on to the accountancy matters that my hon. Friends want us to discuss. I hope that my hon. Friends will listen carefully as the first thing that I have to say to them is that if they kill the Bill tonight, as is their intention—

Mr. Rooker: Here comes the blackmail.

Mr. Howell: I am about to make an unexceptionable statement of fact. It is certainly not blackmail.

Ms. Short: Yes, it is.

Mr. Howell: My hon. Friend has not even heard it yet.

Ms. Short: We know what you are going to say.

Mr. Howell: What am I going to say?

Mr. Rooker: rose—

Mr. Howell: I am not giving way.

Ms. Short: Will my right hon. Friend give way.

Mr. Howell: No, I am not giving way.

Mr. Rooker: We know what you are going to say.

Mr. Howell: What I am going to say is that if my hon. Friends kill the Bill tonight they will leave the city with no income from the road race.

Mr. Rooker: And a loss of £132,000 a year.

Mr. Howell: I agree with my hon. Friend. That makes his attitude more extraordinary. We shall be left to pay debt charges of £135,000 per year for 20 years or more.
My hon. Friends have asked us all to be honest, so when they get the chance they will presumably stand up and say, "We want to saddle Birmingham with debt charges of £135,000 per year for 20 years, and no income—that is what we want to do with our vote tonight." My hon. Friends, if they are honest, will say, "We want the


people of Birmingham to be saddled with this great debt." I do not. [HON. MEMBERS: "Nor do we."] I am pointing out what will happen if the Bill is killed. We are all responsible for the consequences of our actions.

Ms. Short: rose—

Mr. Howell: I will give way for the last time, because I respect my hon. Friend.

Ms. Short: If we succeed in killing the Bill today, as is our intention, wish and hope on behalf of the citizens of Birmingham, the power to run a two-day road race in Birmingham will remain. The barriers that were bought with the money to which my right hon. Friend refers will continue to be used for the two-day event, so the blackmail that has already been used on us is dishonest. I do not accuse my right hon. Friend of being dishonest, but the two-day event can continue and the barriers can continue to be used. Killing the Bill will not close down the two-day event.

Mr. Howell: I am sorry to say that I disagree with that.

Mr. Rooker: The Bill will not affect it.

Mr. Howell: I am pointing out my interpretation, just as my hon. Friends are entitled to do. My hon. Friends do not want the proposals contained in the Bill.
The promoters say that the proposals in the Bill are essential for the future of the road race. The logical conclusion of that is that my hon. Friends do not want the Bill to be carried forward on the conditions which the promoters tell us are essential.

Ms. Short: They are not telling the truth.

Mr. Howell: I wish that people would not make such interventions. It is not my experience that officers and leading members of Birmingham city council tell lies. They do not. I advise my hon. Friends that, outside the Chamber, they had better not make the kind of comments about officials that they have made inside it tonight. That is rather sad.
The trouble with my hon. Friend the Member for Hodge Hill is that he has been hoist with his own petard. My hon. Friends the Members for Perry Bar and for Hodge Hill insisted on section 3 and the old clause that is now section 14 being placed in the Bill. Once they were in, the city auditors, Queen's counsel consulted by the city and the Audit Commission responsible, said that the accounts had to be made up in that way. They all offered that opinion and the point at issue—

Mr. Terry Davis: Will my right hon. Friend give way?

Mr. Howell: No, I will not give way for the moment because I am developing this point in answer to my hon. Friend's question.
Price Waterhouse, the Queen's counsel and the Audit Commission all said that in accordance with the Bill and section 14, which was forced on the Bill by my two hon. Friends who are now objecting—

Mr. Rooker: It was willingly accepted.

Mr. Howell: Under those terms, the city council had to produce these accounts on the basis of creative accounting. It had to account for the amount of income in the Bill that

could be properly assigned to promotional effects. The city council then had to employ another consultant to assess the benefit of the road race.

Mr. Davis: rose—

Mr. Howell: I will give way in a moment.
It went to the firm of Alan Pascoe and his associates, who have considerable experience in sports promotion. They were asked to advise the city on the beneficial effects of sponsorship of the road race for the promotion of Birmingham. That is where the figure of £600,000 comes in. My hon. Friends are continually saying that it is a subsidy, but it is not.

Mr. Davis: Will my right hon. Friend give way?

Mr. Howell: I will give way in due course.

Mr. Davis: My right hon. Friend is misleading the House.

Mr. Howell: I am not misleading the House—I am trying to correct what was said earlier. We are approaching the Division and I have a good deal more to say.

Mr. Davis: Will my right hon. Friend give way on this point? He has said that the council had no choice—that it had to credit the account—but that is not true.

Mr. Howell: All right, I will give way once more.

Mr. Davis: My right hon. Friend has told the House that three bodies told the city council that it had to credit the road race account with an amount for the promotion of tourism. He said that the council had no choice—that it had to do that. Those were his words, as Hansard will show.
I draw my right hon. Friend's attention to the actual words used by leading counsel. My right hon. Friend said that the auditors, the Audit Commission and leading counsel told the council that it had no alternative. On being asked by the council whether it could credit the road race account—not whether it must, but whether it could—leading counsel said:
A credit may be carried to the motor race account.
He did not say that it had to be carried. The council could credit the account if it wished, and it did wish.

Mr. Howell: I am afraid that I do not agree with my hon. Friend's interpretation. His entire speech was based on the city council's having behaved improperly. He has now quoted a QC's opinion that the council was behaving perfectly properly. We are quibbling only about whether it ought to credit the account or whether it may credit it. My hon. Friend has shot himself in the foot. I accept the wording that he quoted, but what the QC said was, "You may do it," and Price Waterhouse had already said that it should.
What is more important than what was said by Price Waterhouse or the QC is the fact that the Audit Commission said that the accounts had been properly conducted, and signed them. Those accounts have been audited and accepted by the Audit Commission. I advise my hon. Friends not to go around saying that there is anything improper about accounts that have been challenged and checked by auditors, the Audit Commission and Queen's counsel.
The race, moreover, is making a profit. The costs for the city in 1986 were £1,530,000 and the income £898,000, so in that first year the race made a loss. In the second year, 1987, the costs were £1,561,000 and the income £1,222,000. Last year, 1988, the costs were £1,215,000 and the income £1,215,000. The race has broken even in three years. That should be a cause for general rejoicing, and I am sorry that it is not.
The accumulated profit, as the hon. Member for Birmingham, Northfield (Mr. King) has said, is now £469,000. That is the profit that my hon. Friends wish to destroy, but I do not wish to destroy it. Even if we take into account the £600,000 contribution for promotional purposes, of which my hon. Friends do not approve, the profit on the race this year will be £550,000. We are talking about £50,000 even if we allow their figures, which I dispute. On the clear evidence of the best cost accounting procedures, after three years the race is already beginning to become profitable. The elected city council supports the race and the MORI poll shows that the majority of those living in the area are in favour of it. I believe that the House should give the Bill a Second Reading and I am sorry to have heard such jaundiced objections to it.

Mr. David Gilroy Bevan: I am proud to disclose that I am an adviser to the BSG group which includes Autolease, which has been described as the largest car dealer in the world. The company is based in my constituency, employs hundreds of Brummies, produces employment and motor cars everywhere and backs the commodities that go into the car race. I am also involved with PPG Industries which is based in the constituency of the hon. Member for Birmingham, Ladywood (Ms. Short), which employs hundreds of people and provides the paint finishes for most of the world's motor car manufacturers offered to bring the lead car from the Indianapolis to the car race in Birmingham, though this offer was not taken up.
I am extraordinarily pleased to disclose those interests because I believe that Birmingham needs the business that those fine firms generates, because otherwise there would be no profits on which to pay taxes or for us to debate in the House. There would be no money to allocate. The car race is an expression of what I believe is good for Birmingham. I compliment my hon. Friend the Member for Birmingham, Northfield (Mr. King) and the right hon. Member for Birmingham, Small Heath (Mr. Howell). The right hon. Member for Small Heath made an excellent speech. He has always been a good Brummy and has promoted what is good for the city. I wish that his hon. Friends would take more notice of him.
I was elected to Birmingham city council some 30 years ago and I voted in favour of the car race at least 20 years ago when it first cropped up. At that time, the present leader of the majority Labour party in Birmingham, Councillor Dick Knowles, made an excellent speech in which he said that the car race will be like the Brummy, brash, noisy and boisterous, but nevertheless warm and welcoming. The car race has been welcomed by citizens and businesses in Birmingham and they want it perpetuated.
Prior to the promotion by the city council in 1985, a survey showed that 82 per cent. of respondents voted in favour of holding motor racing in the city and only 18 per

cent. voted against. In January, a survey on the proposed amendment to the 1985 Act revealed that 76 per cent. of respondents thought that the motor race was good for Birmingham, bringing publicity and employment; 75 per cent. of respondents thought that the motor race was likely to improve the image of Birmingham in other parts of the country and abroad; and 58 per cent. of the respondents would not object to extending the race for three days, although 42 per cent. were against. Opposition to a four-day race amounted to 48 per cent. but there was a majority in favour of the extension of 52 per cent.
However, those figures take no note whatsoever of firms that are not enfranchised and cannot vote—the firms in the city of Birmingham which employ so many constituents of hon. Members on both sides of the House representing Birmingham constituencies. They are involved primarily with the motor components industry and would have voted in favour of the car race had they had the opportunity to vote. Birmingham is still a substantial home for the car manufacturing business, as is the west midlands generally. Those are some of the facts. The motor race is backed by firms and by the people.
In the 1970s and the early 1980s, during the regrettable economic recession which occurred in my city, the traditional industries diminished to a large extent. Without the implementation of service sector industries such as the leisure industry, including the car race and tourism, we would have suffered grievously. Some £500 million is now earned by tourism, including the car race, in the midlands. In the broadcloth of the country, the industry has employed up to 50,000 people each year. It brings about 16 million tourists to this country and we are told that almost 17 million may come here next year.

Ms. Short: The road race is bringing in those people?

Mr. Bevan: No, tourism, of which the road race is an integral part, brings in those numbers. About £15 billion comes in from tourism and helps to pay wages costs generally.
One of the wards in my constituency is near the national exhibition centre, which the right hon. Member for Small Heath has so eloquently described. The unemployment rate there is almost 6 per cent. less than in the wards that are further away. That is a direct result of the national exhibition centre, and together with the convention centre, into which £136 million is being invested, it will make Birmingham a tourist centre of immense interest. The road race is becoming a vital and axiomatic part not only of tourism, but of the success of industery generally and the motor industry specifically.
I was asked to say how much hospitality I have received. I do not drink and I do not smoke, but firms in my constituency, and many others, have hospitality tents in which they rightly entertain clients. I have had many a cup of tea and a plate or two of food, and there is no shame in that. The motor race brings kudos to Birmingham, and without the income that tourism earns, wages would not be available with which to pay bills. With those words, which I hope will be noted well, I rest my case for supporting the Bill.

Mr. Jeff Rooker: I am grateful for being called and I am glad that you are back in the Chair, Mr. Speaker, because you have missed an


interesting half Second Reading debate. I am the fifth hon. Member to speak, not counting the Minister, who was extremely neutral, spoke for about three minutes, did not give the Government's view and did not take interventions. I was rude to him, and for that I apologise.

Mr. Peter Bottomley: I did not declare my interest. I bought a cup of orange juice at Birmingham international station today.

Mr. Rooker: The debate today has not been balanced. There is a case to be made for the Bill and a case against it. There is a case for substantial and serious amendment to the Bill, and until I was called, only my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) had the opportunity to present that case. In the seven minutes remaining, I cannot make the case properly. However, I must make it clear that we want the Bill to be debated as fully as possible. As with the previous Bill, the reason that we tabled our motion is our prime concern about the finances, which are at the root of the difficulties.
We saw a bottomless pit opening up with the finances and that was why the House, with agreement from hon. Members of all parties and on both sides of the argument, sought to regulate the finances in the Birmingham City Council Act 1985. It is because the regulations that this House wrote into the statute have not been followed that, with our humble non-accountant, non-legal opinion—the arithmetic is on our side—we tabled the instruction; that is partly why we wish to make a detailed case about why the Committee that considers the Bill should amend it in line with our instruction.

Ms. Short: I am grateful to my hon. Friend for giving way because, as he knows, the road race runs through my constituency and it looks as though I will not get an opportunity to speak in the debate. My hon. Friend knows that I agree with him about the financial objection and that I share his criticism.
I should like to put it on the record briefly that the people who live in the area cannot bear the thought of a four-day event with all the attendant noise and inconvenience, and those people are entitled to have their views respected. Even the hon. Member for Birmingham, Yardley (Mr. Bevan), who spoke in favour of the Bill, recognised that his poll showed that a majority in the area is opposed to the race. That is a second and important criticism—[HON. MEMBERS: "He did not."] Yes, he did. He said that only 48 per cent. were in favour.

Mr. Rooker: My hon. Friend makes a valuable point, and I wish that she could deploy her case on behalf of her constituents who are directly affected.
At the outset, I should declare an interest, because I attended the 1987 road race. Unlike my hon. Friends who have signed the instruction, I made it my business to ensure that I was in the city in 1987, so that I could witness the road race at first hand. Although I did not expect the matter to come before the House so soon, if it did, I wanted the experience of having walked the circuit and seen what happens.
I had a personal report from the police afterwards about the conduct around the circuit and around the pubs. I have never had to take any action on the report, because the road race was a peaceful occasion. I paid for the two

tickets that I was offered, although there was a bit of an altercation when the officials said, "Mr. Rooker, there is no account for us to pay guests' money into." I said, "Well, the city of Birmingham rates fund will do for me." I paid for the tickets, but I did not contribute towards my lunch, and to that I extent I have an interest to declare.
I turn now to the point made by the hon. Member for Yardley, before he addressed the key financial aspects. Of course, my hon. Friends and I are all on the side of our city. Most of us were actually born there and are proud of it. Nobody who visits Birmingham today can deny that there has been a sea change in the past decade. There is a buzz and a hum in many parts of the city. However, at the same time there is also massive poverty, to the extent that the city council is setting up an anti-poverty programme, which is supported right across the city council. That is something that the council has never had to do or thought that it had to do before. It is important to note that point. It is no good saying that things are all black or all white or that they are all good or all bad, because there is no doubt that there has been a sea change.
I agree with most of the examples given by my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), who mentioned the national exhibition centre and the Olympic bid. However, the difference, which he did not seem to grasp, is that all those things give the citizens of Birmingham capital assets, whereas the road race accounts give them a revenue plughole down which hundreds of thousands of pounds of ratepayers' money are being poured at present and down which it is planned to pour even more in the future. It is no good my right hon. Friend denying that, because, as a percentage, more people in his constituency will be losers under the poll tax than in any other Birmingham constituency. When the losses of the road race start to be taken into account for the rate support grant—or the revenue support grant as it will be known under the poll tax legislation—the citizens of Birmingham will be doubly penalised.
I want to follow up one brief point about motor racing that was made by the hon. Member for Yardley. Of course there is a massive spin-off from motor racing. Most of the motor racing circuits of the world are dominated by British designers and British drivers. However, I have often wondered, how come the car factories in this country are not making racing motor cars? We cannot sell the motor cars we are making on the scale that we should be able to sell them if it was true that there is a fantastic and direct spin-off which clearly there is not. It is no good saying that, if there is lots of racing, we can make lots of cars, because it does not work like that. Therefore, there is a case to be made for—

Mr. Roger King: rose in his place and claimed to move, That the question be now put.

Question put, That the question be now put:—

The House proceeded to a Division—

Ms. Short: (seated and covered): On a point of order, Mr. Speaker. The promoter of this Bill spoke for an hour. This road race take place in my constituency and my constituents have strong views about it. I have been here for every minute of the debate and I have not been given a chance to speak. I do not believe that it is right to allow a closure when a debate has been conducted in such a way.


The promoter of the Bill took a long time hogging the debate and you, Mr. Speaker, have only allowed one speech against the Bill.

Mr. Speaker: I have to take into account the amount of time spent on this debate. I have to say that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) spoke for 44 minutes. There have been some very long speeches.

Ms. Short: What about my constituents?

Mr. Speaker: I know, but the point is that two and a half hours have been spent on this matter and it is not the end of it. It is for the House to decide whether the Bill should be closured or not.

The House having divided: Ayes 153, Noes 30.

Division No. 163]
[9.59 pm


AYES


Aitken, Jonathan
Gregory, Conal


Alexander, Richard
Hanley, Jeremy


Alton, David
Hargreaves, Ken (Hyndburn)


Amos, Alan
Harris, David


Arbuthnot, James
Heathcoat-Amory, David


Arnold, Jacques (Gravesham)
Heddle, John


Arnold, Tom (Hazel Grove)
Hicks, Mrs Maureen (Wolv' NE)


Atkinson, David
Howarth, Alan (Strat'd-on-A)


Baker, Rt Hon K. (Mole Valley)
Howarth, G. (Cannock &amp; B'wd)


Baker, Nicholas (Dorset N)
Howell, Rt Hon D. (S'heath)


Baldry, Tony
Howells, Geraint


Beith, A. J.
Hunt, David (Wirral W)


Bellingham, Henry
Irvine, Michael


Bennett, Nicholas (Pembroke)
Jack, Michael


Benyon, W.
Janman, Tim


Blackburn, Dr John G.
Johnson Smith, Sir Geoffrey


Boswell, Tim
Johnston, Sir Russell


Bottomley, Peter
Kellett-Bowman, Dame Elaine


Bowden, Gerald (Dulwich)
Key, Robert


Bowis, John
Kilfedder, James


Brandon-Bravo, Martin
King, Roger (B'ham N'thfield)


Brazier, Julian
Kirkwood, Archy


Brown, Michael (Brigg &amp; Cl't's)
Knapman, Roger


Browne, John (Winchester)
Knight, Greg (Derby North)


Buchanan-Smith, Rt Hon Alick
Knowles, Michael


Budgen, Nicholas
Knox, David


Carlile, Alex (Mont'g)
Lang, Ian


Carlisle, Kenneth (Lincoln)
Lawrence, Ivan


Carrington, Matthew
Lee, John (Pendle)


Chalker, Rt Hon Mrs Lynda
Lightbown, David


Chapman, Sydney
Lilley, Peter


Clark, Dr Michael (Rochford)
Lloyd, Sir Ian (Havant)


Conway, Derek
Lloyd, Peter (Fareham)


Coombs, Anthony (Wyre F'rest)
Lyell, Sir Nicholas


Coombs, Simon (Swindon)
MacKay, Andrew (E Berkshire)


Cope, Rt Hon John
Maclean, David


Critchley, Julian
McLoughlin, Patrick


Currie, Mrs Edwina
Mans, Keith


Davies, Q. (Stamf'd &amp; Spald'g)
Martin, David (Portsmouth S)


Davis, David (Boothferry)
Maude, Hon Francis


Day, Stephen
Mayhew, Rt Hon Sir Patrick


Dorrell, Stephen
Michie, Mrs Ray (Arg'l &amp; Bute)


Douglas-Hamilton, Lord James
Miller, Sir Hal


Durant, Tony
Mills, Iain


Favell, Tony
Moate, Roger


Fearn, Ronald
Moss, Malcolm


Fenner, Dame Peggy
Neale, Gerrard


Forman, Nigel
Needham, Richard


Forsyth, Michael (Stirling)
Neubert, Michael


Forth, Eric
Newton, Rt Hon Tony


Fowler, Rt Hon Norman
Nicholls, Patrick


Fox, Sir Marcus
Nicholson, David (Taunton)


Fraser, John
Norris, Steve


Fry, Peter
Onslow, Rt Hon Cranley


Garel-Jones, Tristan
Paice, James


Gill, Christopher
Pattie, Rt Hon Sir Geoffrey


Golding, Mrs Llin
Porter, David (Waveney)


Goodhart, Sir Philip
Portillo, Michael


Greenway, Harry (Ealing N)
Raffan, Keith





Raison, Rt Hon Timothy
Thurnham, Peter


Rhodes James, Robert
Townend, John (Bridlington)


Sackville, Hon Tom
Trippier, David


Sainsbury, Hon Tim
Twinn, Dr Ian


Shaw, David (Dover)
Vaughan, Sir Gerard


Shaw, Sir Giles (Pudsey)
Waddington, Rt Hon David


Shaw, Sir Michael (Scarb')
Walker, Bill (T'side North)


Shersby, Michael
Wallace, James


Skeet, Sir Trevor
Waller, Gary


Smith, Tim (Beaconsfield)
Watts, John


Speed, Keith
Widdecombe, Ann


Steel, Rt Hon David
Wilshire, David


Stern, Michael
Wilson, Brian


Stevens, Lewis
Winterton, Mrs Ann


Stewart, Allan (Eastwood)
Wood, Timothy


Stradling Thomas, Sir John



Summerson, Hugo
Tellers for the Ayes:


Taylor, John M (Solihull)
Mr. David Gilroy Bevan and


Tebbit, Rt Hon Norman
Mr. Andrew Hargreaves.


Thorne, Neil



NOES


Barnes, Harry (Derbyshire NE)
Lofthouse, Geoffrey


Brown, Ron (Edinburgh Leith)
Loyden, Eddie


Buckley, George J.
McNamara, Kevin


Clay, Bob
Pike, Peter L.


Corbett, Robin
Redmond, Martin


Dalyell, Tam
Rooker, Jeff


Davis, Terry (B'ham Hodge H'I)
Short, Clare


Dixon, Don
Smith, Andrew (Oxford E)


Ewing, Mrs Margaret (Moray)
Spearing, Nigel


Fisher, Mark
Taylor, Mrs Ann (Dewsbury)


Forsythe, Clifford (Antrim S)
Vaz, Keith


Godman, Dr Norman A.
Warden, Gareth (Gower)


Hattersley, Rt Hon Roy
Welsh, Andrew (Angus E)


Haynes, Frank



Hughes, John (Coventry NE)
Tellers for the Noes:


Jones, Martyn (Clwyd S W)
Mr. Bob Cryer and


Lloyd, Tony (Stretford)
Mr. Dennis Skinner.

Question accordingly agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House divided: Ayes 145, Noes 24.

Division No. 164]
[10.11 pm


AYES


Aitken, Jonathan
Coombs, Anthony (Wyre F'rest)


Alexander, Richard
Coombs, Simon (Swindon)


Alton, David
Cope, Rt Hon John


Amos, Alan
Corbett, Robin


Arbuthnot, James
Currie, Mrs Edwina


Arnold, Jacques (Gravesham)
Davies, Q. (Stamf'd &amp; Spald'g)


Arnold, Tom (Hazel Grove)
Davis, David (Boothferry)


Atkinson, David
Day, Stephen


Baker, Rt Hon K. (Mole Valley)
Dorrell, Stephen


Baker, Nicholas (Dorset N)
Douglas-Hamilton, Lord James


Beith, A. J.
Duffy, A. E. P.


Bellingham, Henry
Durant, Tony


Bennett, Nicholas (Pembroke)
Favell, Tony


Benyon, W.
Fearn, Ronald


Blackburn, Dr John G.
Fenner, Dame Peggy


Boswell, Tim
Forman, Nigel


Bottomley, Peter
Forsyth, Michael (Stirling)


Bowden, Gerald (Dulwich)
Forth, Eric


Bowis, John
Fowler, Rt Hon Norman


Brandon-Bravo, Martin
Fraser, John


Brazier, Julian
Fry, Peter


Brown, Michael (Brigg &amp; Cl't's)
Garel-Jones, Tristan


Browne, John (Winchester)
Gill, Christopher


Buchanan-Smith, Rt Hon Alick
Golding, Mrs Llin


Budgen, Nicholas
Goodhart, Sir Philip


Burns, Simon
Greenway, Harry (Ealing N)


Carlile, Alex (Mont'g)
Gregory, Conal


Carlisle, Kenneth (Lincoln)
Hanley, Jeremy


Carrington, Matthew
Hargreaves, Ken (Hyndburn)


Chalker, Rt Hon Mrs Lynda
Harris, David


Chapman, Sydney
Heathcoat-Amory, David


Clark, Dr Michael (Rochford)
Hicks, Mrs Maureen (Wolv' NE)


Conway, Derek
Howarth, Alan (Strat'd-on-A)






Howarth, G. (Cannock &amp; B'wd)
Martin, David (Portsmouth S)


Howell, Rt Hon D. (S'heath)
Maude, Hon Francis


Howell, Ralph (North Norfolk)
Mayhew, Rt Hon Sir Patrick


Howells, Geraint
Michie, Mrs Ray (Arg'l &amp; Bute)


Hunt, David (Wirral W)
Miller, Sir Hal


Irvine, Michael
Mills, Iain


Jack, Michael
Moate, Roger


Jackson, Robert
Moss, Malcolm


Janman, Tim
Needham, Richard


Johnson Smith, Sir Geoffrey
Neubert, Michael


Johnston, Sir Russell
Newton, Rt Hon Tony


Kellett-Bowman, Dame Elaine
Nicholls, Patrick


Key, Robert
Nicholson, David (Taunton)


Kilfedder, James
Norris, Steve


King, Roger (B'ham N'thfield)
Onslow, Rt Hon Cranley


Kirkwood, Archy
Paice, James


Knapman, Roger
Porter, David (Waveney)


Knight, Greg (Derby North)
Portillo, Michael


Knowles, Michael
Raffan, Keith


Knox, David
Rhodes James, Robert


Lang, Ian
Sackville, Hon Tom


Lawrence, Ivan
Sainsbury, Hon Tim


Lee, John (Pendle)
Shaw, David (Dover)


Lightbown, David
Shaw, Sir Giles (Pudsey)


Lloyd, Sir Ian (Havant)
Shaw, Sir Michael (Scarb')


Lloyd, Peter (Fareham)
Shersby, Michael


Lyell, Sir Nicholas
Skeet, Sir Trevor


Maclean, David
Smith, Tim (Beaconsfield)


McLoughlin, Patrick
Speed, Keith


Mans, Keith
Steel, Rt Hon David





Stern, Michael
Wallace, James


Stevens, Lewis
Waller, Gary


Stewart, Allan (Eastwood)
Watts, John


Stradling Thomas, Sir John
Widdecombe, Ann


Summerson, Hugo
Wilshire, David


Taylor, John M (Solihull)
Winterton, Mrs Ann


Tebbit, Rt Hon Norman
Wood, Timothy


Thorne, Neil



Thurnham, Peter
Tellers for the Ayes:


Twinn, Dr Ian
Mr. David Gilroy Bevan and


Waddington, Rt Hon David
Mr. Andrew Hargreaves.


Walker, Bill (T'side North)



NOES


Barnes, Harry (Derbyshire NE)
Pike, Peter L.


Bray, Dr Jeremy
Powell, Ray (Ogmore)


Clay, Bob
Redmond, Martin


Dalyell, Tam
Rooker, Jeff


Davis, Terry (B'ham Hodge H'I)
Short, Clare


Fisher, Mark
Smith, Andrew (Oxford E)


Forsythe, Clifford (Antrim S)
Spearing, Nigel


Godman, Dr Norman A.
Taylor, Mrs Ann (Dewsbury)


Hattersley, Rt Hon Roy
Vaz, Keith


Henderson, Doug
Wardell, Gareth (Gower)


Hughes, John (Coventry NE)



Jones, Martyn (Clwyd S W)
Tellers for the Noes:


Lloyd, Tony (Stretford)
Mr. Bob Cryer and


Loyden, Eddie
Mr. Dennis Skinner.

Question accordingly agreed to.

Bill read a Second time and committed.

Single European Market

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude): I beg to move,
That this House takes note of European Community Documents Nos. 9756/88 on completing the Single Market and 10413/88 on technical standards and regulations; recognises that the Single Market will bring important opportunities and challenges for business and benefits for the consumer; welcomes progress to date on the Single Market and endorses the Government's strong commitment to completing it; and welcomes the Government's campaign to encourage United Kingdom business to prepare now for the Single Market.

Mr. Speaker: I have not selected the amendment in the name of the hon. Member for Thanet, South (Mr. Aitken).

Mr. Maude: A year ago today, the Department of Trade and Industry launched its single market campaign. Its purpose was to alert business to the opportunities and challenges of the single market. We set ourselves then the target of achieving 90 per cent. awareness of the single market by the end of last year. We met that target well ahead of schedule, and now 50 per cent. of British business is taking action to prepare, recognising that the single market is already becoming a reality.
The need for this campaign is demonstrated by the progress report that we are debating tonight. The Commission was required to produce the report by article 8b of the treaty. It welcomes achievements to date in such areas as standards, financial services, capital movements, public procurement and professional qualifications. It also calls for faster progress in areas such as plant and animal health, taxation and frontier controls, and it stresses the importance of sustaining a rapid rate of progress.
The second report concerns the operation of directive 83/189, which is about preventing the creation of new technical barriers to trade within the Community and encouraging the production of European standards.
The Cecchini report suggested that the single market could create a 4 to 5 per cent. increase in Community GDP and nearly 2 million new jobs. But those benefits will not happen automatically. They depend on removal of all non-tariff barriers. They depend on open markets and a liberal approach.

Mr. Bob Cryer: With the removal of the internal barriers, the textile industry fears that all the imports into the Common Market might come into the United Kingdom. That seems likely, in view of our huge balance of trade deficit in manufactured goods. Do the Government have any plans to ensure that there is a fair allocation of textile imports throughout all the member states, rather than allowing them to flood into the United Kingdom?

Mr. Maude: That matter will have to be sorted out in the negotiations on the multi-fibre arrangement which, as the hon. Gentleman knows, falls to be considered in the current GATT round.
We have shown here in Britain that deregulation, openness and competition are central to economic success. For Europe to succeed, it needs to follow the same approach, and we are winning the argument. The

completion of a real single market, which was, after all, what the EC was originally about, is unquestionably in the British interest.
On the few occasions on single market measures where we dissent from the majority, it is where we favour the more liberal, more European approach; while some of our partners, who may make more communautaire noises than we do, stand fast for narrow nationalistic protectionism.
But a recognition of the benefits of the free market approach is growing in Europe. Last year, the Council of Ministers agreed a resolution which reaffirmed our commitment to improving the climate for business. It recognised the importance of small and growing firms and the need to ensure that their enterprise and enthusiasm a re not strangled by red tape. It acknowledges
that the development of the spirit of enterprise and the creation of new firms in the community must be encouraged".
It also acknowledges that existing legislation should be reviewed with a view to simplification. I stress that that resolution was a proposal by the European Commission which was supported unanimously by all 12 member states.
We can claim some credit for creating the climate of opinion in which such a resolution was possible. A few years ago, it would not have been. The same mere market-oriented approach is seen in the field of standards. Old-style harmonisation has gone—the days of regulating every aspect of every product. Under the new approach to standards, we simply set the essential requirements—for example, relating to health and safety.
The specialist standards bodies then draw up the detailed standards to help companies meet the requirements. That new flexibility has resulted in agreements covering, for example, machine safety, construction products and toy safety. In that and other areas, we are making such harmonisation as is necessary a liberalising process, rather than a repressive and regulatory one.
In the past 12 months, we have seen key agreements on, for example, the liberalisation of capital movements, the mutual recognition of professional qualifications, the liberalisation of road haulage, and the opening up of public procurement markets. In air services, we are enjoying the benefits of liberalisation already, with new routes and lower fares.
Last Thursday, at the Internal Market Council, we reached agreement on a directive to remove barriers in trans-frontier broadcasting. Attempts by others to introduce rigid and protectionist provisions failed. The outcome is essentially flexible and liberal.
A priority for the future is financial services. We are discussing directives on banking, investment services and life assurance services.

Rev. Ian Paisley: Page 1 of the document on completing the single market says, in short, that completion of the internal market is the key not only to the Community's prosperity but to the Community's future. It is the key that will and must unlock the door. What is the Government's attitude to unlocking the door, and where will the unlocked door take us?

Mr. Maude: It is a somewhat cryptic phrase, but we agree entirely with the sentiment that the priority for the Community at the moment is completing the single market, and completing it in the sort of way that the


United Kingdom finds congenial. That is undoubtedly the key to unlocking a great deal of prosperity that is diverted into needless costs and restrictions.

Mr. Dennis Skinner: Is the Minister aware that some people have found the key to the door in the Common Market? The Mafia has found a golden key and unlocked the door. When it shouted, "Open sesame!" It found £6,000 million behind the door. It is odd that the Minister should come here with a motion supported by the Prime Minister who only a few months ago was lecturing everybody at Bruges about the dangers of the Common Market. Yet she has signed a motion welcoming the single market, having guillotined the measure in the House. It is high time the Minister told us about the hypocrisy of the Government in trying to give the impression that they are against the Common Market when late at night, as on this occasion, they come along, with the payroll vote, to push a motion through.

Mr. Maude: The hon. Gentleman may find it remarkable, but it is possible to be in favour of some parts of a concept without finding it necessary to embrace warmly every aspect of everyone's view of it. It is possible to be against illegal fraud, as we are—more robustly perhaps than others in the Community—and still be in favour of the completion of the single market. The hon. Gentleman, with his detailed and expert knowledge of the subject, should know that allegations of fraud within the European Community, which we take extremely seriously, have nothing to do with the completion of the single market. The single market is about removing barriers to trade across Europe and nothing to do with providing funds.

Mr. Teddy Taylor: When he deals with the progress of the directive on machine safety, can the Minister give us any indication of how it will help free trade, particularly bearing in mind that it was considered by a Standing Committee for two minutes on 30 January, after it had already been agreed, and then passed by the House without a vote? As we know, it will add huge extra costs to the activities of small and medium industries. Can he tell me in what way that directive will further the interests of free trade in the Community?

Mr. Maude: It will do so by preventing those countries in Europe that might otherwise be minded to do so—in some instances they do so at the moment—from erecting bogus barriers to trade on the pretext of safety requirements. It will lay down that, if a machine meets the essential safety requirements set out in the directive, another country in Europe cannot prevent it from being marketed.
That is quintessentially what the single market is about. It is about preventing countries from erecting false barriers to trade on bogus pretexts. It will be effective in doing that. We have succeeded in achieving the bulk of our requirements. It is essentially a liberal directive, along the lines that we urged throughout. I hope that my hon. Friend will draw comfort from that. The suggestion that it will impose extra costs on small businesses is mistaken.
In respect of the financial services directive, our objective is to secure a sound framework of Community legislation that encourages competition and provides

equal access to European Community financial markets. We have had strong objections to the Commission's proposals on reciprocity in financial services. We would like to see them dropped altogether, but the Commission's revised proposals, published last Thursday, are a real improvement, although significant points of difficulty remain.
We shall continue to resist attempts to use the single market as a pretext for the erection of protectionist barriers against the rest of the world. Again, recent developments are encouraging. Both Heads of Government and the Commission have reaffirmed the need for open markets.
The Community, after all, lives by trade. A policy of "fortress Europe" is simply not credible. Indeed, it would undermine the benefits of more competition and greater consumer choice that the single market is designed to bring. There is also a social dimension to the single market. It is inseparable from the economic benefits of more jobs, more choice and greater prosperity.

Mr. Jeremy Hanley: In addition to the excellent initiative and effort being put into developing business advantages for small and medium enterprises in Europe, adding to that the great advantages that will exist for businesses trading in Europe under the single market, many companies that will not choose to trade in Europe will nevertheless be fully affected by the single market and by added competition from Europe. Will my hon. Friend encourage companies, whether or not they choose to trade in Europe, to carry out a full 1992 audit to discover the advantages, and in some cases perhaps the added competition, that they will face following 1992?

Mr. Maude: We have stressed throughout the campaign that we have run that the single market will affect every business in the country and that whether a business is now trading, or might in the future trade, in Europe, it will be affected. To the same extent that the rest of Europe becomes part of our home market, we will become part of the wider European market, so it will become commensurately easier for continental firms to trade here. My hon. Friends point is correct, and I hope that it is widely understood.

Mr. William Cash: My hon. Friend will be aware of the Commission document entitled "The company approach to 1992", which expressly omits any reference to the United Kindom Parliament and its scrutiny process but refers to the scrutiny processes in other parts of the Community, such as the European Parliament and the Commission.
Does my hon. Friend agree that it is essential not only that the scrutiny process in this Parliament is known at large, through documents published by the Commission—of which 50,000 have been distributed in this country—but that the Department of Trade and Industry should also make sure, as I understand that Department is about to do, that people know that this is the House to which Ministers and others are accountable and to which people are elected to represent their constituents?

Mr. Maude: We treat the process of scrutiny extremely seriously. The attention which my hon. Friend and his colleagues who sit on the European Legislation Select Committee devote to these measures is welcomed by the


Government. I hope that he appreciates the effort that we are making to bring these matters before the relevant Committees at an earlier stage in the negotiating process because the comments that the House makes are useful to us as we continue the process of negotiation.
I was referring to the social dimension of the single market and said it was inseparable from the economic benefits which would flow from the single market by way of more jobs, more choice and greater prosperity. We welcome measures which help to tackle the problem of unemployment—which is now greater throughout most of the rest of the Community than it is in this country—and measures which improve health and safety.
But there are those in the Community who want to impose new social legislation on us. One example is compulsory worker participation in the running of companies. We are not opposed to the involvement of employees and we have done a great deal to encourage it but the imposition of rigid systems on all companies in all countries is alien to all that the Community should stand for.
I am encouraged to know that I can rely on the support of many Opposition Members for the Government's robust hostility to those proposals. I note from the debate last week on weights and measures how strongly many of them object to the imposition of measures of purely domestic concern by the Community. I look forward to receiving, particularly from the hon. Members for Bolsover (Mr. Skinner) and for Bradford, South (Mr. Cryer) robust support for our standpoint on this issue so that we may go forward on a bipartisan basis in opposing the imposition by others in the Community of alien measures.

Mr. Doug Henderson: What evidence has the Minister that the system of worker participation which has been established in West Germany has damaged the efficiency of the German economy?

Mr. Maude: I did not say that it had. All I said was that it is a system not welcomed by companies here. Many companies, and all successful companies, establish their own systems for employee participation, but they are systems agreed by those companies in circumstances which are appropriate for them; and systems which are deemed apropriate by the German domestic legislature for German companies are not necessarily those which are appropriate in this country. I hope that the hon. Member will agree with us in strongly resisting this imposition. I can assure the hon. Member for Bolsover that we have not sold the pass but are defending it strongly—and I look forward to his support for our doing so.

Mr. Doug Henderson: I welcome the opportunity at this late hour to consider the progress towards the completion of the internal market and also to consider the procedure for the provision of information on technical standards, but I must point out, as have some of my colleagues previously, that this procedure is inadequate and that a short debate such as this gives us no proper opportunity to consider the very important matters before us. Parliamentary democracy requires parliamentary scrutiny and we cannot have that if decisions are already made before we come to the House. Parliamentary democracy cannot be guaranteed if

Ministers increasingly fail to make statements in the House on progress on specific proposals which are absolutely vital to our economy, as is now the case, and if other decisions in Europe are reached in private sessions, in private rooms, initially in the Commission and later in the Council of Ministers. We have an excellent example this week of discussions of this sort, which have been taking place on economic and monetary union.
I was interested to hear the commitment of the Under-Secretary of State to raising awareness in the country of the impact of the single market. I hope that all hon. Members will recognise that change must take place in a new, expanded market, and that our role in that market must change. Having said that, however, I believe that there is increasing anxiety about the Government's relationship with Europe. Is this anxiety not a direct reflection of the Government's own anxiety? And is that not itself caused by the Government's own failure to understand in time the true nature of the Single European Act—as I think some of the Minister's colleagues will point out later in the debate? Is it not also the case that the Government's belated recognition that 1992 means more than the free movement of City capital is something on which they did not originally reckon?
Montagu Norman, the legendary pre-war Governor of the Bank of England said that he employed economists to explain to him why he was right. It is obvious to most hon. Members that the Prime Minister must have consulted Montagu Norman's memoirs before she appointed Mr. Walters and her other advisers. It might be wise for the current Governor of the Bank of England to check h is economic textbooks this evening to see on whose advice he has drawn in his discussions in Europe in recent weeks.
Does not this confusion and misapprehension about the Single European Act explain the hectoring and the blustering on behalf of our nation in Bruges not many months ago? Has it not made the task of all of us, of industrialists and of business men, all the more difficult in closing what is undoubtedly our Euro-credibility gap? If we do not do that, will we be able convincingly to press for reform in the Community? I hope that all of us would reckon that such reform is vital to our interests.

Mr. Jonathan Aitken: I am somewhat perplexed by the Labour party's policy after listening closely to that delphically obscure passage about governors, past and present, of the Bank of England. Is the Labour party policy to support the views of the present governor of the Bank of England on economic monetary union or has it come round to support the views of the Chancellor of the Exchequer? One way or another, the Labour party must now make its position clear.

Mr. Henderson: The views of the present Governor of the Bank of England are interesting. I am not sure that those of the Chancellor of the Exchequer are as interesting. The Labour party's view is quite clear: we will consider greater monetary union in Europe when the time is right and we get an exchange rate with which our industry is able to compete in Europe. People who know about industry will realise that that is crucial.
Why have the Government belatedly understood what the single European market is about? We should hardly have expected the Government to agree with everything said by Mr. Delors, but we would have expected them to have a greater rapport with Chancellor Kohl. One can


imagine the horror in some of the back rooms of Victoria street last summer when it was heard that, in his Hanover speech, Chancellor Kohl said that he agreed with most of what Mr. Delors said about the importance of the social dimension. I was encouraged by the fact that the Under-Secretary of State said earlier that he had begun to understand the importance of that.
The Government have a number of important obligations in relation to the completion of the single market. They have an obligation to inform our own people, initiate change in Europe on our behalf, represent Britain's interests in Europe and, crucially, make changes in this country, which are necessary in preparation for 1992. It must be clear to the Department that we are the least well prepared for 1992 of the major EC countries.
It is right for the House, in this debate, to examine how the Government have discharged their responsibility.

Mr. Maude: What evidence does the hon. Gentleman have for that assertion?

Mr. Henderson: I am happy to refer the Under-Secretary of the Tyne and Wear chamber of commerce, which referred to an article in the Daily Mail—which I am sure the Under-Secretary has read. Ten major exporters in the United Kingdom were phoned up in French and asked if they could provide an order for the person making the call. Seven out of the 10 giggled at the switch board and the other three cut off the inquirer. When a similar inquiry was made in Germany and in France—in English—seven out of 10 in both cases understood the orders.
The noble Lord Young recently told industrialists that they should buy a ticket for Brussels. Surely, one has to know why one is going before travelling. I heard what the Under-Secretary said about the cost of air transport and liberalisation, but that has not done much to reduce the charge between there and London.
Writing in The Journal of Northern Business—which deals with the area that encourages Fujitsu and other companies—Lord Young says:
DTI surveys show that, nationally, only around one firm in three has begun to prepare seriously for action"—
that was in January this year—
and there is no evidence that companies in the North are any better prepared.
An article in Scottish Management Survey stated in February:
The principal anxiety, however, arises from the lack of preparedness which the survey reveals in the approach of Scottish managers to the challenge of 1992 and the Single European Market. A third of the respondents simply say that the event is 'not important'.
There is more evidence from the CBI. In its survey of 200 companies, 31 per cent. said that they had made no preparation for 1992; 3 per cent. said that they had opened sales offices; 4 per cent. had managed to open agencies; and only 7 per cent. had introduced new language training. I do not think that that is good enough.

Mr. Maude: I am sure that the hon. Gentleman will join me in welcoming the fact that since January—a date to which he did not refer until it was drawn from him—the proportion of businesses that are preparing for 1992 has risen from one third to half.

Mr. Henderson: I hear what the hon. Gentleman says. I shall be interested to hear the statistical basis for it in the morning.
Every dog has his day; does not every salesman have his? Is it not clear by now that the Secretary of State has failed in the preparation for 1992? He cannot even convince the friendly Institute of Directors of his case. Will the Under-Secretary now join his colleagues in expecting the boss to hang up his salesman's patter before it is hung up for him by his own boss? If the boss will not give assurances, as he cannot, will the Under-Secretary acknowledge that urgent action is needed if we are to inform and educate our business community? Does he recognise the danger of a hands-off attitude? Does he agree that an assessment by the Department of the likely impact in each industry is vital? I am sure that Miti in Japan would undertake such an assessment if it were in our position; indeed, it is undertaking one on behalf of Japanese companies.
Will the Under-Secretary make more resources available to co-ordinate the task through the DTI, as a matter of urgency? If he is somewhat weary of making commitments my colleagues and I may understand, although I am not sure that the business community will. I assure him that if he accedes to my requests it will not make him an interventionist; I am merely asking him to be an informationist.
Better information by itself is inadequate, however. The Government have an important obligation to engineer change in Europe. That is not only in Europe's interests; it is in ours. Europe cannot prosper as long as there is a great divide between the north and the south—or, more accurately, between the Bonn-Paris central axis and the most peripheral areas of southern Italy, Greece, Iberia, Ireland and, increasingly, many parts of the United Kingdom.
Some might argue that markets will resolve that division. Few in the Community seem to believe that, although there are some in Whitehall who do. Few believe that the poorer regions can achieve growth without strong regional policy, that skill levels can be raised without strong social policy or that infrastructure can be improved without intervention expenditure. Few in our textile industry, in regions already referred to, believe that they have any future without intervention in trade through the multifibre arrangement—and also intervention in this country to modernise plant and product and bring marketing to a standard that would allow it to compete principally in Europe. Few would argue that those objectives and others can be achieved without greater European public expenditure.
We should be taking the lead in those matters, in our own interests and in the interests of the Community. We should learn from others. We should learn from the Germans that public expenditure is worth while and can be justified to improve the private sector and that intervention is necessary if education standards are to be raised, training is to be improved and research and development is to reach the necessary standards. Perhaps then we would reach the standards of product development achieved by the Germans and take the lead in introducing some of the most important proposals, such as the three-way catalytic converter for vehicle exhausts, the new standards in ventilating equipment and the new environmentally safe batteries which will be a key issue in the coming months.
Perhaps it is possible to prosper without intervention domestically or with a social dimension in the EC, although I doubt that. But it is surely impossible for Britain to prepare for 1992 with such an overvalued currency. Industrialists throughout the country, including the CBI, tell us regularly that the one factor which destroys our ability to export is the exchange rate. Will the Government face up to the fact that it makes no sense for one of the weakest manufacturing nations in the EC to have one of the most overvalued currencies? That is a recipe for industrial devastation now, further problems in 1992 and even more severe difficulties if the proposals discussed by the governors of the European banks ever reach the political agenda.
The noble Lord Young may crawl to the recalcitrants in the Institute of Directors, saying that the abolition of exchange controls, the freeing of international road haulage or the freeing of non-life insurance shows that 1992 really means deregulation. I hope that the Under-Secretary of State for Corporate Affairs will he wiser than that and will agree with the manufacturing industry in Britain and in Europe that intervention is necessary to secure common high-technical standards, the best product design, structural changes in industry and the highest standards of environmental protection and safety.
To date, only 108 of the 279 proposals have achieved a common position. We shall face difficult issues in future, such as animal and plant controls, fiscal change, border controls and the movement of people, which are all vital to our future. The challenge to Britain is to produce a European agenda, to take a lead in European standards, technical, material and moral, and to recognise that our macro-economic policies, particularly our exchange rate, is crucial in any European context. Our challenge is to acknowledge that if supply-side improvements do not happen autonomously in Europe, why should they happen autonomously in Britain. Our challenge is to realise that unless all those measures and others are taken, far from being a great opportunity, 1992 will be a great threat.
I hope that the debate will help to clarify the issues in the documents, but the Opposition cannot support the motion. I hope that hon. Members from both sides of the House will express their concern and join us in opposing the motion.

Mr. Teddy Taylor: This is a very short debate on an important issue, and I shall say just a few words.
Everyone in the House tonight will probably agree that free trade in Europe would benefit the United Kingdom and Europe. Our massive balance of trade deficit with Europe suggests that free trade and the removal of artificial restraints and bureaucratic controls, particularly in Germany and to a lesser extent in France, would help us all. A real 1992, with free trade in Europe, would benefit us all. But we have to ask ourselves whether we are aiming for free trade, whether free trade will be achieved, and what is actually facing us.
What is happening? The Minister said that more and more people were aware of 1992. What worries me is that they are aware of something that is not going to happen at all. I can give many examples. I had the pleasure of attending a recent conference of the print industry and paper manufacturers. They were talking about 1992 and

the great opportunities of the new changes. I asked all 160 people, including company chairmen, managing directors and accountants, whether they knew of any proposal in the 1992 measures designed for printing or books. I said, "You are the people who know—I don't. You are the company chairmen and managing directors, and you have paid a lot of money to come to a great conference and everyone is delighted with it. Do you know of any proposal that will help your industry?" I did not receive one response, and I know of none, save the possible imposition of VAT on newspapers and books.
The Minister talked about insurance services. I am a director of an insurance company and I have been to lunch with people from many insurance companies. We hear constantly about the glorious new opportunities for insurance freedom in 1992, but I must ask the Minister what those opportunities are. I have read the directives with great care and we have studied them at board meetings, with experts submitting reports, but the only proposal for non-life insurance seems to be for a limited degree of freedom in what are known as large risks. That means that our company might have the opportunity to insure the Eiffel tower, if the French agreed. However, that freedom might not materialise, due to the rule put into the proposals by the Commission at the last minute to the effect that if a company can offer a suitable insurance service it can keep the other lot out. My insurance company—and two other leading insurance companies of which I am aware—thus came to the conclusion that there is no liberalisation in the proposals.
When one considers particular industries, it is nonsense to say, "Please prepare for 1992." Looking at the proposals, it is clear that free trade is not on the way. Sadly, the measures that we have considered to date have largely been matters of little significance. Sadly, too, there are major problems. Does my hon. Friend the Minister seriously think that we can have free trade in 1992 unless we sort out the inner German trade agreement? He will be well aware that the country with which we have the worst balance of payments deficit is Germany. He must be aware from reading Community documents that the position is disastrous.
In the reports about food aid, for example, we find that there were massive complaints last year about food contaminated by radioactivity, which apparently came from eastern Europe. My hon. Friend must be aware that trade is flowing in from East europe to East Germany and to West Germany under the inner German trade agreement. The only people who can control the trading conditions are the West German Government. We are all aware that trade is flowing from eastern Europe to Germany.
The Minister may think that that is a silly point, but let him go and speak to the textile industry or to the people working in the knitted goods industry. They have plenty of documents on the matter. I have one here from the Apparel, Knitting and Textile Alliance, which is clearly terrified that the alleged single European market will simply mean that east European goods will pour in. What can my hon. Friend do about that? We have put particular cases to him, but we are told that it is the German Government who determine that a certain percentage of value must be added before goods can come out of West Germany. What on earth can we do about that, and what is already being done?
I want to ask my hon. Friend about the interpretation and application of free trade. We have already had one or two minor free trade measures for which we should be delighted, such as one on buses. I appeal to my hon. Friend to come to Southend and ask people at the airport how they get on with the free trade in buses. The Minister should consult the Foreign and Commonwealth Office and his own Department. He will know that, although our right hon. and learned Friend the Foreign Secretary met Mr. Genscher, although our right hon. Friend the Minister of State took proceedings, and although I took a group of Southend councillors to West Germany with the help of our ambassador in Bonn, sadly, nothing happened. Before the Minister goes ahead with more of this massive timetable, I plead with him when talking of the glorious opportunities to ask whether those opportunities really exist or are being planned.
I hope that the Government will also consider what other countries think about "fortress Europe". I was in America last week and met many people in business there. Some firms, such as Ford and Du Pont say, "Don't stir things up—we're in Europe and we want to make sure that we don't stir things up unnecessarily and bring out any anti-American feeling there." If the Minister were to talk to those engaged in trade, however, he would find that when they consider the proposals—there is some element of protectionism in all of them—they are concerned that the proposals seem specifically designed to try to keep out foreign trade. If the Minister has any doubts about that, he should talk to those who export computer chips because there are new proposals about the basis of organisation and about where research and development must come.
The Minister should also talk to the American banks. He will know that in America there is a system of national treatment whereby foreign banks have to have the same facilities and the same rights as United States banks. But that is not what "reciprocity" means, as my hon. Friend the Minister must be well aware. This is something entirely new, which will be protectionism in banking. If he doubts that, he should ask the Bank of America and its vice-president, Mr. Coleman.

Mr. Maude: I am sure that my hon. Friend has seen the Commission's new proposals on reciprocity, which were issued on Thursday last week and which specifically refer to national treatment.

Mr. Taylor: My hon. Friend must be well aware that the document, which I have with me in this pile of documents, states that the question of reciprocity can be referred to the Commission for interpretation. We know that the Minister and the Common Market have, on a number of occasions, given many specific assurances. Does my hon. Friend recall Ministers coming to the House time and time again to say, for example, how delighted they were that in 1987 agricultural spending increased by only 3·7 per cent. but the Court of Auditors' report shows that that was achieved by accountancy fiddles and that the real figure was 24 per cent. If my hon. Friend doubts that, he should come to Southend and talk to our bus company.

Mr. Maude: I am not quite sure where my hon. Friend's last point takes us, as it seems to lead into a wholly different area. On his point about reciprocity, the Commission's new proposals specifically state that the

Commission would have powers to act against other countries' banks seeking authorisation in the Community only if they did not offer national treatment to EC banks seeking authorisation there. As I said, that point has met many of the existing anxieties, and although it does not meet all our concerns, it goes a considerable way towards doing so.

Mr. Taylor: 1 should be delighted if that were so, but on the basis of my discussions last week with American banks and on the basis of speeches made by them on the basis of what had been agreed, I can tell the Minister that they are still acutely concerned that when it comes to the assessment of reciprocity and the question of the national agreement, it is the Community as a whole that will be considered by the Commission, not individual member states. Am I right?

Mr. Maude: I stress again that the new proposals were only announced on Thursday, so the banks to which my hon. Friend properly spoke last week will not have been aware of this radically new set of proposals.

Mr. Taylor: I hope that the situation is indeed so dramatically changed, but my understanding was that the assessment of the national situation was on the basis of the group of Community countries as opposed to individual member states. I ask the Minister, what is the need for that in any event, and if it is not a problem, why is everybody so concerned about it? Let the Minister talk to the chairman of Millipore, who has said that trading with Europe is difficult now—but that after 1992 it will become much worse.
I ask my hon. Friend the Minister to consider another important point. What on earth will be the position of the rules being imposed on us, which will create massive problems? For example, how will this country benefit from the tax harmonisation to which he referred? I refer especially to the harmonisation of taxation on alcohol and tobacco, on which the Government claim that we still have a measure of unanimity although, as he well knows, the European Court can overturn that by taking action. If my hon. Friend doubts that, let him look back to the speeches by Labour Treasury Ministers at the time of the sixth directive, which stated that all our zero rates were safe—yet six have now been overturned by the European Court.
The Minister will be aware that the assessment of the Health Department, according to an answer given in Parliament on 18 May last year, was that if the proposals were implemented, the consumption of alcoholic beverages would be increased by between 10 and 35 per cent. and of tobacco by between 5 and 20 per cent. but, more importantly, that the Government would lose revenue of exactly £3 billion, which would have to be made up in other ways.
The Minister also said that the Mafia issue and fraud were completely apart from the issue of 1992 and free trading. He said that with conviction, as though it was absolutely clear. I appeal to him to contact Giovanni Falgone, Sicily's leading anti-Mafia magistrate, who said specifically in a speech, reported in the Financial Times on 24 February that one of the least desirable benefits of a European single market would be to facilitate the export of Mafia crime from Sicily under the guise of apparently respectable business operations.
My hon. Friend should not under-estimate the extent of Mafia involvement in the EEC. He will be aware that the House of Lords has said that about £100 million per week is being spent on fraud. He will know that I have repeatedly asked his Department and others what action was taken on the clear example of the 19 million lira paid to the Mafia by the EEC for the non-delivery of non-existent fruit juice to NATO headquarters in Palermo. I have asked that question year after year since it occurred and I have asked about many other examples, but nothing has happened and no information has been forthcoming. If my hon. Friend the Minister thinks that there is no connection between fraud and the Mafia, perhaps he will consult those who seem to specialise in the matter.
My real worry is that in the Council of Ministers we are not able to control matters easily. I should like to ask the Minister about the control of firearms and immigration. The Minister will know that there is a proposal shortly to come before the Council of Ministers about mutual recognition of firearm certificates, which would mean that I could obtain a gun—perhaps a kalashnikov—in Sicily or Greece and then come to London and wander around with it. I understand that the Government oppose that and believe that it will undermine their firearm controls and and basis of the open frontiers.
There is a dispute, because the Commission appears to take the view that that should be decided by a majority vote and the Government take the view that it should be decided by unanimity. I ask the Minister what precise powers we have in that connection. My understanding from previous such occurrences is that, unless the Members of the Council of Ministers unanimously decide to reject the advice of the Commission, there is effectively nothing that we can do about it, apart from seeking to go to the European Court, perhaps three years later, which would not achieve a great deal.
I believe that that point is also relevant to immigration. We shall take a strong view on immigrants from Hong Kong after we hand over the country to the Communist Chinese, but what about the situation of the nearby Portuguese colonies which are classified as the overseas territories of Portugal and places such as French Guiana, which are classified as overseas territory of France? I suggest that the relationship of open frontiers could have an adverse effect on us.

Mr. A. J. Beith: rose—

Mr. Taylor: The main question is whether the Minister is really convinced that we are facing up to the real issue of free trade and not just going through a lot of silly nonsense on the various proposals that have come forward so far. I had the pleasure of having a long discussion with a civil servant, who had spent more than a year going backwards and forwards to and from Brussels engaged in the harmonisation of a proposal on clinical thermometers. His professional opinion was that there never had been any problem with clinical thermometers. I cannot see any problem that could emerge from clinical thermometers, but there was a real intention and a real need to get what was alleged to be a common standard.
When we consider the proposals for the noise levels of tower cranes, the regulations for the protection of hotels against fire, the recent modification of the lawn mower harmonisation of noise emission standards regulations and the hygiene conditions of fish—all of which I am sure

are important to fish, to lawn mowers and to power cranes—I wonder whether we are really making progress on the real issues of free trade.
If the Minister has any doubts about this, he should think about insurance and banking, which matter a great deal to us. He should consider the implementation of the proposals. Before the Government go ahead and spend a lot more money seeking to persuade businesses of the unique opportunities open to them from a single market, they should try to establish—to some reasonable satisfaction—that the single market is likely to be created.
Sadly, I believe that the single market will not happen, although I wish it would, as it would be good for British business. I believe that we shall simply burden ourselves with a pile of rather foolish bureaucratic measures. We shall not solve the true problems of the EEC, such as the common agricultural policy and inability to control finance. Although it would be grand to say that we are moving towards free trade, sadly I believe that we are simply moving more and more towards protectionism and towards high expenditure, instead of the kind of liberality and freedom that Conservatives would choose.

Mr. A. J. Beith: The hon. Member for Southend, East (Mr. Taylor) brings a great deal of information and the fruits of much inquiry to our debates. His logic, however, sometimes deserts him.
The hon. Gentleman has argued that 1992 will create a problem because holders of passports from Macao will be able to enter this country more easily after the abolition of border controls. The problem that the hon. Gentleman describes exists now. The border controls make no difference. The holder of a Portuguese passport issued in Macao is entitled to enter this country now. The disparity between the inhabitants of Macao and those of Hong Kong is of the Government's making and is not changed in any way by the arrival of 1992.
The hon. Gentleman argued that the progress towards the single market is almost non-existent, and he outlined a number of areas where the conditions are less than ideal. He then argued that 1992 will open up a vast range of new opportunities for the Mafia to clean up. The hon. Gentleman has ignored the fact that the single market does not involve the disbursement of funds, which is where fraud has occurred. The hon. Gentleman cannot have it both ways—either the single market will make a difference or it will make no significant difference and therefore will not open up new opportunities for fraud.

Mr. Teddy Taylor: rose—

Mr. Beith: The hon. Gentleman did not give way to me, so I do not feel obliged to give way to him. I attempted to intervene earlier to make my point.
The fact that we are debating now, at great length, making a reality of the single market, is a criticism of how the Community has developed. The essence of the creation of the Community was that it should be a single market—that is why it was called the Common Market. Wider political, social and strategic functions were in the minds of the founders of the Community, with the Common Market as its base.
The immediate advantage derived from a large market comparable to that of the United States sold the idea of the Community to many people in Britain. That we should


have to set a target date to achieve some of the goals espoused at the Community's creation is a source of disappointment. Lord Cockfield, who is now in such bad odour with No. 10, played a large part in erecting 1992 as the target for achieving what should have been done years ago and thus to clear the way to free trade.
We often do not understand that the creation of common standards is necessary to bring down trade barriers. In that way, we will get away from the problem of another European country denying access to goods, on the grounds that they do not meet the required standard.
It is even more important to establish common standards now that concern about the environmental effects of products is so much greater. That concern has led to more and more necessary pressure for tighter standards. If those standards are not common throughout Europe, they will act as a restraint on trade. We might end up imposing conditions on our manufacturers which, desirable in themselves, may not have to be met by other European manufacturers. As a consequence, our manufacturers will suffer. It is of urgent importance that such common standards are achieved. In the course of achieving that goal, however, the Government have not killed the bogey of unnecessary harmonisation.

Mr. Quentin Davies: Given that this country sometimes has higher standards governing health, safety or consumer protection, it is particularly in our interests that such standards should be harmonised, since otherwise our producers will be undercut in any free trade area—of which my hon. Friend the Member for Southend, East (Mr. Taylor) is in favour—by competition from the continent. That applies to manufacturing, where health, safety or environmental standards may be higher in this country, and also applies very much to financial services, a matter of legitimate concern to all parts of this House because it is a major British industry and one where we have very high standards of consumer protection, so it is particularly important that we are not undercut from the Continent by the lack of harmonisation.

Mr. Beith: I agree entirely with that view. It cuts both ways. Our standards are not always higher, whether one looks at some aspects of financial services or pollution standards in cars. We have not always been in the lead, but in some fields we are and have been, and we have a particular interest in ensuring that our standards are also required elsewhere.

Mr. Tim Janman: Will the hon. Member give way?

Mr. Beith: I have just taken a rather long intervention, and I must make progress in what is a short debate. I know that other Members are seeking to take part.
I was about to say that the Government have not entirely killed off the bogey of unnecessary and pettifogging harmonisation in areas where it is not essential. A number of us were last week exchanging arguments with the Minister about goods which are not traded across the Community, buying 3 lb. of carrots or 5 lb of potatoes. When the Minister was saying earlier that this Government were pleased that harmonisation would not involve the imposition of legal restraints on matters

not relevant to trade across the Community, I think he rather overlooked our exchanges last week and the likelihood that shopkeepers will be prosecuted for simply giving customers what they want when they weigh out goods on the spot; petty and trifling things like that give the European Community a bad name and give the objective of a single market in which different standards do not intervene a particularly bad name.
I feel the same about much of the VAT harmonisation. I was a member of the Treasury Select Committee when it produced its report critical of the VAT harmonisation proposals because, again, they are not directly relevant to the trading of goods between countries. Goods bear VAT in one country at the level at which it is applied in that country, and it is not a distortion of the price of the imported product that it is charged VAT at the same rate as the domestically produced product. That is another area where there can be an unnecessary degree of harmonisation.

Mr. Janman: The hon. Gentleman talks about what is relevant to the market. Does he not agree that, when we are talking about a market within one member state or a market across western Europe, market forces will determine which goods and services, and therefore that the standards on which those goods and services are based, will win in the marketplace? One does not need Eurocrats and politicians to make decisions on what those standards should be. If the hon. Member believes in a genuine free market across Europe, yes, let us have the free movement of goods and services across national boundaries, but it should be up to the customer within that European market to decide which set of standards will prevail.

Mr. Beith: The answer to the hon. Gentleman's question is no, it is not possible to assume that the market will sort out standards when national Governments will impose differing standards across the Community. It is not sufficient to assume that the market can be left wide open to the exploitation of the consumers by the failure of producers to apply standards, particularly in matters not immediately apparent to the consumer, on quality, safety or matters which may not harm the consumer but may harm others when he uses the product, such as the emission standards in vehicles. So there are all sorts of reasons why Government action in these areas is necessary, and compelling reasons why that action should not be taken solely by national Governments, because if it is, it will produce different standards and restraint of trade.
There are other anxieties about 1992 and the single market, some of which we ought to be able to dispel. I was quite struck by an article which appeared in The Independent on Monday by Catherine Itzin and Corinne Sweet about pornography. They make the point quite clearly:
EC deregulation in 1992 will open the UK market to European pornography.
I should be grateful if the Minister will comment on this in his reply. It does not seem to me that the existence of a single market will in any way remove the controls which we have in this country and in other countries on pornography and its distribution, and if it leaves any gap, we should do something about it.

Mr. Cryer: The hon. Gentleman is a member of the Liberal party, which is the Euro-fanatic party par excellence. Does he not realise that imports cannot be


controlled without some scrutiny at borders? He referred to pornography, but the same argument can be applied to drugs. If we remove border controls, we remove scrutiny. We must consider illegal weapons and terrorists, but the Minister did not mention those matters, which are of great concern.

Mr. Beith: It is not true that there is no control over pornography, drugs or terrorism in the absence of border controls. A large proportion of the successful action taken against drugs is taken not by border controls, but occurs as a result of intervention within the country into which the drugs are brought. That occurs from tip-offs and detection work, not as a direct result of border controls. I am not aware of the balance in the case of pornography, but border control plays only a limited role in the detection of the passage of drugs.
Border controls do not stop criminals; they stop policemen and law enforcers. Who stops at the border? Not the person carrying the drugs. The police force stops at the border and must enter another jurisdiction and involve Interpol before it can take effective action across the borders. Criminals do not know these bounds. Where criminality is fuelled by vast sums of money, for example with drugs and pornography, borders are now of virtually no conseqence and are of little importance.
The hon. Member for Bradford, South (Mr. Cryer) is correct to say that we should have more discussion about border controls and their relevance, not least with regard to entry to the Community as a whole. Much of what enters this country is making its first landfall in the Community. We could have a complicated debate about that.

Mr. Hanley: Will the hon. Gentleman give way?

Mr. Beith: I want to make progress, because I know that other hon. Members want to speak.
The Government's motion refers to the Government's "strong commitment" to preparing for 1992. Where is that strong commitment with regard to the essential investment which will be required in 1992 if Britain is to compete in the single European market? Where is the commitment to investment in links from the north of England, Scotland and north Wales to the Channel tunnel? Ministers have appeared at meetings and said that that is a matter for British Rail.
There are major strategic decisions to be taken in areas where Governments most legitimately and necessarily are concerned. The French Government have no such inhibitions about involvement in ensuring that investment takes place in transport links to the Channel tunnel. Such investment is very important for industry in the north-east of England if it is to participate in the single European market. We clearly need a sign of the Government's commitment to the single European market in that area.
Where is the Government's commitment to the European monetary system and to the other monetary developments referred to in the report produced by the central bankers yesterday? The EMS is the most obvious first step. The Minister referred to the financial aspects of 1992, but he fails to recognise that industrialists want a stable and satisfactory exchange rate from 1992. Indeed, they want it sooner than that. They do not want to be at the mercy of a rapidly changing currency level or one that is prone to unrealistic valuation.
It is clear that the Chancellor of the Exchequer privately shares most of the views expressed by industry. Perhaps the Minister does as well; I do not know. He is not allowed to take that view, because the Prime Minister says that he cannot. The Government are divided on a fundamental issue of economic policy which has implications for this subject and for many others.
An historic statement was made tonight. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) announced from the Labour Front Bench that it was Labour party policy that Britain should join the European monetary system when the time is right. I feel that I must be right, because once again I find myself in disagreement with both the Conservative and the Labour parties, which are in agreement with each other. I think that that is a new development.

Mr. Henderson: Will the hon. Member accept my correction—that we would consider the matter of joining the EMS if the time were right?

Mr. Beith: Of course I accept the hon. Gentleman's clarification. Whereas the Government will join the European monetary system, when the time is right—and we all know that the time will not be right so long as the Prime Minister is in office—the Labour party will consider whether to join the European monetary system when the time is right. Whether the words "when the time is right" refer to the time to join or to the time to consider joining is a matter for further clarification, for which I will not press tonight.
These are all weasel words, designed to escape a fundamental disagreement that now appears to exist between those two parties as to whether we should join the exchange rate mechanism of the European monetary system. I submit that that should be in that mechanism. I know that that is the view of the Chancellor, and he is in a ludicrous position to be presiding as Chancellor when he cannot implement it.

Rev. Ian Paisley: What is the future of Europe in the eyes of the Government and the Opposition? The Liberal spokesman, too—the hon. Member for Berwick-upon-Tweed (Mr. Beith)—failed to tell us his idea of the future. The explanatory document contains what I call high-falutin language about
the key that will … unlock the door.
Where will this door take us? Anybody who has been in the European Parliament knows that the door will take us to a federal Europe, a united states of Europe, a Europe in which national Parliaments have very little, if any, say.
The explanatory document says:
we can stride confidently ahead into the new Europe which awaits us.
What is that new Europe?

Mr. Cash: It is not a federal Europe.

Rev. Ian Paisley: The hon. Gentleman does not know very much about the trends in Europe. He does not know about the President of the Commission. He does not know very much about the votes in the European Parliament. I advise him to take a look at some of those votes.
Let us have a look at the rest of this document. It says:
we are all the guardians of the future of Europe. The people of Europe expect us to deliver. We must do no less.


What do they expect us to deliver? What are the Government telling the people of the United Kingdom they must deliver? The people of this country have a right to know. We have been told that we can make changes. The fact is that, when Europe makes up its mind, we can make no changes. When Europe has made a decision, this Parliament and all the other national Parliaments have to bow to it. That is the sad thing.
This document refers to a "truly European broadcasting area". It says:
Such an area also involves freedom to broadcast, receive and transmit radio and television programmes".
Who will control that? It will not be controlled by Acts of this Parliament. That is the vision of the great Europe that is ahead.
When we come to the abolition of controls on persons at internal frontiers, we have a very serious situation. If the Commission approves a directive that a person is entitled to carry a firearm, and if someone gets a firearm, say, in Sicily, nobody at a country's frontier can prevent that person from entering or take the gun away.
The hon. Member for Newcastle-upon-Tyne, North (Mr. Henderson) talked about the sort of scrutiny we are having tonight. We in Northern Ireland have suffered from that in our own legislation.
Orders in Council cannot be amended, and it is not possible to debate them properly. Now, in respect of Europe, we are into the same category of debate.
People should look very seriously at this matter. It is all very well to talk about a great, grand, new Europe and about doors opening. I should like to know what sort of Europe the Government envisage. What I have learnt from the European Parliament, from the European Commission's President, to whom I have talked, and from all the attitudes of Europe, is that they want a united states of Europe, in which they will govern, and we will be like a parish council with no real authority to govern our own country.

Mr. Nigel Spearing: I shall follow the hon. Member for Antrim, North (Rev. Ian Paisley) in some personal remarks in a few moments, but first, in my semi-official capacity, I want to refer to the scrutiny procedure.
The Minister said how seriously the Government treat scrutiny. I shall believe that when the time given for debates of this importance is more than that allocated to domestic statutory instruments by a Conservative Government in 1951, who kept the House up all night when such statutory instruments were open-ended. That is a measure of the procedural slippage on our domestic legislation. That our debates on these important matters are still limited to an hour and a half after 10 o'clock shows the concern that Her Majesty's Government have for such matters. It so happens that not many hon. Members are here tonight. That is not commensurate with the importance of the topic. If they were, three hours would be a better time.
I am rather disappointed with the report. It is the halfway stage in the creation of a single market, and document 9756/89 is supposed to tell us what has been happening. Instead of listing 279 documents in an appendix, as I thought it would, it looks ahead at what is

still to happen. We do not know how far things have got. There is no index tick sheet or list of where the documents have gone. We know that some have been adopted, some have been proposed and some are in the process of being discussed. There is no appendix to tell us how far that process has gone.
I now switch to a personal hat. I am afraid that Conservative Members are living in an area of unreality, despite the efforts of the noble Lord Young. We keep on referring to 1992. It is not then at all; it is now. It is by the end of 1992. The French refer to 1993, but it is happening now. If business men or Conservative Members want to know what is going on they had better have a look at the weekly reports of the Scrutiny Committee. I do not know how many Conservative Members read them or send them to their chambers of commerce weekly or whether those chambers of commerce buy them. We made 44 reports last year and there will probably be the same number this year. Anything up to 20 complex and detailed proposals and documents are reported on each week. That is what is going on.
Let me deal now with one or two definitions. The EEC is not just a free trade area. As we know, it is something far more. I shall telescope my remarks and my logic because this fills in what the hon. Member for Antrim, North was saying. With the abolition of frontiers, which is what the 1992 package is all about, the frontier is not definable. Until now we have thought of lorries and guns and most of the points that my hon. Friend the Member for Bradford, South (Mr. Cryer) made. But surely by definition a frontier marks a difference of jurisdiction—Britain, France, whatever it may be. We may not appreciate that, because if we go from here to Portugal we go to another jurisdiction via the sea. If the law is different from one side of the border to the other, the border exists. Ergo, the dissolution of frontiers means the dissolution of differences of jurisdiction and law. But over what area does that apply?
Recently I asked the Attorney-General to what areas of law the abolition of frontiers did not apply. I think that he said family and criminal law. There is hardly an aspect of life in Britain, whether commecial, industrial, specifications, standards of safety and all sorts of things, which cannot be within the scope of the single European market without frontier. Ergo, it means that our jurisdiction over these matters is ended—the point made by the hon. Member for Antrim, North—and we are subject by and large to a superior jurisdiction, that of the combined institutions of the Commission, the Council and the European Parliament. If any Conservative Member wishes to contest that, he is free to do so, but surely one follows from the other. That is what the Single European Act was about. That is why the Government, who want to listen to what we have to say now, did not want to listen in 1986 when the Act was railroaded through on a guillotine.
These debates, important though they are, are only advisory. The Minister can go and do what he does at Brussels at his peril. It is difficult to find out exactly what he does. It is no wonder that not many hon. Members come to these debates even though they are shorter than they should be.
The Government are committed not just to that other jurisdiction but to economic and monetary union. As long ago as 19 June 1983, the Prime Minister signed the solemn declaration on European union at Stuttgart, which reads:


determined to achieve a comprehensive and coherent common political approach and reaffirming their will to transform the whole complex of relations between their States into a European Union.
It may not be the united states of Europe, to which the hon. Member for Antrim, North has just referred, and to which the Prime Minister referred at Bruges. It is something unitary. It is not the united states of Europe because the states do not exist. It is one nation, a European union. Laws are made in a unitary manner. Of that there can be no doubt.
It is not therefore surprising that the latest emanation is the expression of the single market that we had in the Delors banking report yesterday:
as capital movements are liberalised and as the internal market programme is implemented, each country will be less and less shielded from developments elsewhere in the Community. The attainment of national economic objectives will become more dependent on a co-operative approach to policy-making.
Hon. Members may translate that as they will. Later, it said:
Although in many respects a natural consequence of the commitment to create a market without internal frontiers, the move towards economic and monetary union represents a quantum jump which could secure a significant increase in economic welfare in the Community. Indeed, economic and monetary union implies far more than the single market programme and, as is discussed in the following two Parts of this Report, will require further major steps in all areas of economic policy-making.
Hon. Members may say that we have not agreed to that. But we have, because on at least two occasions—at Stuttgart and in the preamble to the Single European Act—we signed a declaration that we are in favour of economic and monetary union.
As Mr. Delors and his friends, including in an individual capacity the Governor of the Bank of England, have said, this cannot be done without a central bank, one currency, a single economic policy and, of course, harmonisation of taxation. So it is not just a single market that we are in; it is much bigger. One goes with the other. It is something to which Her Majesty's Government, knowingly or otherwise, are committed but to which I hope that my hon. Friends and I are not.

Mr. William Cash: I do not share the pessimism that has permeated much of the debate. Many aspects of the single market can and should be welcomed, but I have grave reservations about what I have consistently described as creeping federalism. There is continuing evidence of that. There is no doubt that the European Court of Justice itself has a centre of gravity which inevitably will draw us further in that direction unless we do something about it.
I was heartened—this is one reason for my current state of optimism—by a recent visit that I paid to France with my fellow members of the Select Committee on European Legislation. It transpired while we were there, by coincidence—apparently following the lines that we in this country have been adopting in our small campaign to ensure that federalism does not take a grip—that in the French Parliament—in the National Assembly and in the Senate—Bills of Parliament were introduced to reassert their say over European legislation. Obviously, that say has been diminishing to a point when they could take it no longer.
I believe that we shall find that happening elsewhere in Europe. While, therefore, I am a supporter of the single market, for all the reasons that can be adduced—greater liberalisation of capital movements and so on—some of which have been under-estimated in a number of the speeches made tonight, there is now a great opportunity for us, through the national Parliaments of the Community, to make up for what has been described as a democratic deficit. The European Parliament—unless we were to become a federal state—will not do that.
It is vital that we use the fermentation process of debates of this kind to raise the awareness of the people of this country to what is going on in Europe. At the same time, we can alert them to the advantages of what is going on—and the reservations we have. We can then allow the democratic process to do its job. As some French senators told us, Britain is, in effect, leading Europe back into democracy through what we have been doing in this House.
It is indicative that tonight, while we do not have a full Chamber, there are many more Members in attendance at this late hour than there are for many debates which take place in prime time. I agree with the hon. Member for Newham, South (Mr. Spearing) that a disproportionate amount of time is spent on the directives compared with primary legislation. We dealt with the second banking directive in about an hour and a half, whereas we spent about two months looking into the Banking Bill before it was passed in 1987. It seems, from what has been said by the Leader of the House and others, that there will be changes in our procedures.
The hon. Member for Antrim, North (Rev. Ian Paisley) referred to what is contained on pages 13 and 14 of the report that is before the House, under the description "The prospect ahead". We find there descriptions that go way over the top of what is involved. For example, we are told that heroic decisions are to be taken to ensure that the internal market is completed.
This is, in many respects, a prosaic exercise with much at stake, and we must get it right. But I have reservations, for example, about the directive on health and safety, which no doubt contains much useful material. If a law is passed but not enforced elsewhere in the Community, that sets up an anti-competitive regime. It means that, whereas the Health and Safety Executive in this country is enforcing the requirements, they may not be enforcing them elsewhere in Europe.
When the hormone regulations were about to go through, we debated them in the House. We made sure that there was a debate before adoption. We should follow that principle—as set down in a resolution of this Parliament in 1980—in every respect.
There are great economic advantages in the single market, but there are distinct disadvantages if we are to go down a federal route. I say that with no apology for repetition. There is a centre of gravity towards federalism; we can and will resist it, but we will be able to do that only by taking effective measures in the House and in the country. Other member states will follow us towards that end.

11 .49 pm

Mr. Maude: My hon. Friend the Member for Stafford (Mr. Cash) finished on a note that will command widespread support in the House. There may be those in


the Community who wish the Community to move in a federalist direction, and he asserts firmly, as I am content to do also, that the Government will resist such a move. It is quite inappropriate, and also quite unnecessary in achieving the real benefits that are to be gained under the provisions of the single European act. I can reassure him and others who have voiced such fears that the Government will continue robustly to resist moves in that direction.
My hon. Friend the Member for Southend, East (Mr. Taylor) mentioned firearms and frontiers. It is important to be clear about this: steps are being taken and work is being done on removing some of the inconveniences of frontiers for legitimate travellers, and it is perfectly proper that that work should go foward; but we have said repeatedly that the work should come to fruition only as far as is consistent with retaining proper control over the illegal passage of drugs, firearms and other things which concern us all.
My hon. Friend the Member for Southend, East referred specifically to the directive on firearms. He is quite right to say that we have opposed this proposal, as have several other member states. We shall continue to do so. Article 36 of the treaty allows restrictions on imports which are justified on the grounds of public security, and we shall continue to uphold our right to restrict the import of things which come under this heading.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the free circulation of pornography. The self-same article of the treaty allows import restrictions justified on grounds of public morality. I hope that that reassures the hon. Gentleman. We will maintain our right to impose checks at frontiers to control the movement of drugs, pornography, terrorists and firearms.
My hon. Friend the Member for Southend, East also referred to the problems of inner-German trade. I recognise that there is concern about this. That is why officials of my Department have been in Bonn today to discuss with the German Government their control methods and their checks to deter fraud. The German Government put a great deal of effort into checking goods at the inner-German borders to ensure that goods are not being diverted from other eastern bloc countries. They carry out checks at factories in Germany, all of which must be authorised before they can carry on inner-German trade. They have taken severe action where fraud has been found, and people have been sent to prison for such frauds. For all these reasons, leakage of East German goods into member states is low, but we will follow up any specific cases which the hon. Member for Southend, East or any other hon. Member cares to raise with us.
The hon. Member for Berwick-upon-Tweed talked much good sense on this subject, greatly at odds, if I may say so, with what was aptly described as the "Euro-fanaticism" of many in his party. He took a practical view of what the single market can achieve. There are real benefits for this country, but we must not allow ourselves to be diverted—

It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business).

The House divided: Ayes 106, Noes 17.

Division No. 165]
[11.54 pm


AYES


Amess, David
Knowles, Michael


Amos, Alan
Lang, Ian


Arbuthnot, James
Lawrence, Ivan


Arnold, Jacques (Gravesham)
Leigh, Edward (Gainsbor'gh)


Arnold, Tom (Hazel Grove)
Lightbown, David


Atkinson, David
Lilley, Peter


Batiste, Spencer
Livsey, Richard


Beith, A. J.
Lloyd, Peter (Fareham)


Bennett, Nicholas (Pembroke)
Lord, Michael


Bevan, David Gilroy
Lyell, Sir Nicholas


Boswell, Tim
Maclean, David


Bowis, John
McLoughlin, Patrick


Brandon-Bravo, Martin
Mans, Keith


Brazier, Julian
Maude, Hon Francis


Bright, Graham
Meyer, Sir Anthony


Brown, Michael (Brigg &amp; Cl't's)
Miller, Sir Hal


Browne, John (Winchester)
Mills, Iain


Burns, Simon
Moynihan, Hon Colin


Burt, Alistair
Neubert, Michael


Carlisle, Kenneth (Lincoln)
Nicholls, Patrick


Carrington, Matthew
Nicholson, David (Taunton)


Cash, William
Norris, Steve


Chapman, Sydney
Paice, James


Coombs, Anthony (Wyre F'rest)
Porter, David (Waveney)


Coombs, Simon (Swindon)
Portillo, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Raffan, Keith


Davis, David (Boothferry)
Rhodes James, Robert


Day, Stephen
Sackville, Hon Tom


Douglas-Hamilton, Lord James
Shaw, David (Dover)


Durant, Tony
Shaw, Sir Michael (Scarb')


Ewing, Mrs Margaret (Moray)
Steel, Rt Hon David


Fallon, Michael
Stern, Michael


Fearn, Ronald
Stevens, Lewis


Fenner, Dame Peggy
Stewart, Allan (Eastwood)


Forman, Nigel
Stradling Thomas, Sir John


Forsyth, Michael (Stirling)
Summerson, Hugo


Forth, Eric
Taylor, John M (Solihull)


Fry, Peter
Thompson, D. (Calder Valley)


Garel-Jones, Tristan
Thompson, Patrick (Norwich N)


Gill, Christopher
Thurnham, Peter


Goodhart, Sir Philip
Twinn, Dr Ian


Hanley, Jeremy
Waddington, Rt Hon David


Hargreaves, Ken (Hyndburn)
Wallace, James


Harris, David
Waller, Gary


Howarth, Alan (Strat'd-on-A)
Watts, John


Howarth, G. (Cannock &amp; B'wd)
Welsh, Andrew (Angus E)


Hunt, David (Wirral W)
Wheeler, John


Irvine, Michael
Widdecombe, Ann


Jack, Michael
Wilkinson, John


Jackson, Robert
Wilshire, David


Janman, Tim
Wood, Timothy


Johnston, Sir Russell



King, Roger (B'ham N'thfield)
Tellers for the Ayes:


Kirkwood, Archy
Mr. Stephen Dorrell and


Knapman, Roger
Mr. David Heathcoat-Amory.


NOES


Barnes, Harry (Derbyshire NE)
Paisley, Rev Ian


Dixon, Don
Powell, Ray (Ogmore)


Foster, Derek
Skinner, Dennis


Golding, Mrs Llin
Spearing, Nigel


Haynes, Frank
Wardell, Gareth (Gower)


Henderson, Doug
Wareing, Robert N.


Kilfedder, James



Loyden, Eddie
Tellers for the Noes:


McFall, John
Mr. A. J. Beith and


McKay, Allen (Barnsley West)
Mr. Bob Cryer.


Molyneaux, Rt Hon James

Question accordingly agreed to.

Resolved,
That this House takes note of European Community Documents Nos. 9756/88 on completing the Single Market and 10413/88 on technical standards and regulations; recognises that the Single Market will bring important opportunities and challenges for business and benefits for the consumer; welcomes progress to date on the Single Market


and endorses the Government's strong commitment to completing it, and welcomes the Government's campaign to encourage UK business to prepare now for the Single Market.

Transport Infrastructure (Private Investment)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fallon.]

Mr. Peter Fry: When I was first elected Member of Parliament for Wellingborough nearly 20 years ago, a local journalist asked me what I wanted to achieve as a new Member of Parliament. I replied that what was needed was better road communication. My interest in transport infrastructure was one of my first concerns as a Member of Parliament. Now, after 15 years as joint chairman of the parliamentary road study group, my interest has not diminished but has squared to the national scene.
My constituency, lying between the M1 and the A1, and with the long-awaited M1/A1 link to run just north of it, is crucially placed in our road network. Although much has been done to improve communications locally and nationally, problems are beginning to emerge. Congestion is not reducing, and even in medium-sized towns such as Wellingborough or Kettering there are increasingly long queues at peak hours every morning and evening. Any temporary hold-up on any major road can lead to considerable road chaos.
The really important roads, the lifeblood of our country, are becoming hopelessly overloaded. I have the misfortune to use the M1 regularly. Even when the M40 is completed, whole stretches of the M1 will be well over design capacity. It has now reached the point at which my constituents cannot estimate the time that they will arrive in London using the M1 because of the congestion and the fact that the most minor accident, or one motorist applying his brakes too quickly can create very long delays.
On the other side of the county, the A1 is totally inadequate for the purpose which it has to serve. It desperately needs widening and turning into a proper motorway for most of its length. Construction of the essential cross-country link, the M1/A1 link, has only just started, 15 years after the then Transport Minister, now Lord Mulley, announced the original scheme, describing it as the link that was vital to the economy of the country and for trade to the east coast ports and to the continent.
Our present situation and the forecasts for the future are not very encouraging. We have the most congested main roads of all the developed countries in the world. In terms of the average annual and daily traffic flow, we have the worst and most crowded motorways and trunk roads. Despite that overcrowding, car ownership per thousand persons is below that in the United States, France, West Germany, Italy, Japan and, perhaps more surprisingly, Sweden and Norway. But we are beginning to catch up. The economic success of the Government's policy and the real increase in incomes mean that many more people are buying cars and will continue to do so. Even the Department of Transport forecasts that there will be up to 30 per cent. more vehicles by the year 2000. The British Road Federation estimates that the increase will more likely be about 45 per cent. to 50 per cent. No forecasts show that there will be a fall in the number of vehicles on our roads.
After the years that I have spent studying transport problems, I have started to ask myself what can be done to alleviate, let alone improve, the situation that we see developing. At present, the Select Committee on Transport, of which I am privileged to have been a member since its institution, is now studying the question of roads for the future. In instigating this debate, I want to make it clear that I do not wish to show any disrespect to the Select Committee. For some time now I have been developing ideas of my own based on observation and experience and I felt that I would like to express them before the Committee reported and before it took evidence on the private funding of the transport infrastructure. Furthermore, I know that my right hon. and hon. Friends will be preparing a paper on this subject and I was anxious to make some contribution before it was published. I want to assure the House that I have not used any of the evidence submitted to the Committee, but I hope to add a little of my own.
Before outlining my suggestions, I must emphasise that I have made two assumptions, with which not everyone will agree. First, I believe that there is a need for new roads because we have already seen the appalling congestion on the major arteries of the country, the M1, the M6 and the M25. That will continue whatever we do about public transport. Secondly, I believe that the Treasury alone will not find enough money to provide the cost of all that is needed. I welcome the increase in transport expenditure under this Government and especially the increase announced in the Autumn Statement. But, realistically, I do not expect sufficient extra resources to be made available to deal adequately with the problem.
Those two assumptions lead me to inquire what can meet the task if public money alone cannot. I accept that already private contributions to some schemes have been significant. Added value or access to a site can be of great advantage to a private developer. Many county councils have been able to obtain large sums to improve local schemes or to build new schemes. Similarly, there have been some large-scale private developments, such as the Dartford bridge crossing, the Docklands light railway and the Channel tunnel, and the Government are to be commended for encouraging such projects. However, as yet there seems to be no acceptable scheme for dealing with the problem of major new roads. The only proposal put forward so far on a major scale was by Tarmac a few years ago for the west midlands, and it was turned down.
The policy until now seems to have been that major road building in particular can be from only public sources and that private investment has been found too difficult to combine with it. I find that a little disappointing in view of the way in which this Government have brought about joint financing, whether of the city technology colleges, the urban development corporations or the renovation of our city centres. One must ask oneself whether there is a means of harnessing private investment with public expenditure to improve our transport infrastructure.
I suggest that before we consider any individual way of doing that, we must make certain provisions. First, no scheme is worth attempting unless there is a clear redefinition of the Ryrie rules, which will mean that

transport budget expenditure is not reduced by the input of any private investment, otherwise no additional infrastructure will be made available to us.
Secondly, far more progress is needed to shorten the enormous period between the conception of a new project and its completion. Fifteen years is far too long for the schemes that we need to put into effect. Thirdly, I accept that there needs to be some degree of risk if private investment is to make a contribution.
What would fit those criteria? We should recall that the Chancellor is encouraging us all to save. He has announced a number of new initiatives with the intention of trying to ensure that less money is spent on immediate consumption and that more is put into preparation for the future. My right hon. Friend is lucky that for the first time for many years there is no competition for the need to sell gilts. The Government's—or the Treasury's—opposition to any other such scheme of investment, in competition with gilts, no longer applies. Why can we not use the principle behind the BEST scheme that the Chancellor has already developed, to obtain money for a new transport infrastructure? That idea could apply to a great many transport schemes, even to the high-speed Channel rail link that is mooted for the next few years and could also cover new Underground lines in London and other major cities.
In my view, a developer could attract a considerable amount of money, provided that the investment was tax-free. That would be a suitable initiative. The capital received from that investment could begin to pay for the project and initially would get it off the ground and pay the interest in the early years. Once the project was completed, the developer, whoever that may be—could decide whether to make additional charges which would provide revenue. Such charges could either be in the form of tolls or, if it were a public transport venture, in fares.
I do not think that the proposals that I am going to make are tremendously revolutionary, but money could be made available at an earlier stage than now to bring about many of the needed improvements in our road and transport infrastructure. Once the road is in use, I suggest that there needs to be public investment because no level of tolls is ever likely to be sufficient to cover the maintenance, the interest on the money borrowed or the repayment of the capital. There will always be some gap between what has been raised in tolls and total expenditure. That is why I believe that the public sector must be brought in. It is essential to ensure that any project is approved by both the Department of Transport and the Department of the Environment so that assistance can be given in planning and early implementation. In other words, the scheme should be stamped as a "necessary" one.
Once the road is open, I see no reason why shadow tolls should not be paid according to actual traffic flows. That is where the risk comes in, because obviously not all schemes would reach their full potential at the same time or over the same period. The question of fixing the toll or, in the case of public transport, of fixing the fares, would be a matter of fine calculation. However, as the public contribution increases, so the loan debt could be repaid and eventually the road could revert to the public sector just as is planned for the Channel tunnel.
There are four advantages of this way of going forward. First, saving would be encouraged. Secondly, public spending would be delayed for some years. Thirdly, the


cost to the taxpayer would be considerably less than if the whole project had to be paid for from the public purse. Indeed, taxpayers would start paying only when they themselves were using the facility either as drivers or as passengers.
Fourthly—this is the most important point—the infrastructure would be made available much earlier than is likely under present procedures. The mixing of public and private finance in transport infrastructure merits further consideration for that last reason. For far too long—under several Governments—this country has been deprived of that kind of investment. Transport has always been the poor relation after some of the more obvious social needs—education, health and housing.
I give full credit to the Government, the Secretary of State and the Minister for at long last realising the size of the task confronting us. However, I believe that the situation is not standing still, but is actually deteriorating. I believe that the problem is such that—just as in dealing with the economy as a whole—the Government cannot do it all alone. The Government need investment from outside.
My proposals may not be perfect and may not be the eventual way in which the Government will decide to go forward, but I am sure that we must evolve some method of bringing private money into transport infrastructure schemes. If we do not, we face the danger that we shall not be able to deal with the increasing problems of all the modes of traffic congestion.
Failure to do that could be disastrous for our national economy.

The Minister for Public Transport (Mr. Michael Portillo): I congratulate my hon. Friend the Member for Wellingborough (Mr. Fry) on gaining this Adjournment debate. I have listened to his speech with great interest. I had already read the drift of his argument during his questioning of witnesses in the Select Committee on Transport. I agree with my hon. Friend on many points.
In recent years, the private sector has come to play a significant role in providing transport infrastructure, and the Government believe that that process can be taken much further. While the public sector will be the predominant provider of roads for as far ahead as we can envisage, we would be foolish if we did not encourage the private sector to supplement that provision, not least because of its enterprise and management skills. That is necessarily an evolutionary process, but progress so far has been encouraging. An important step forward will be taken when my right hon. Friend the Secretary of State publishes a consultative document on private finance aimed at developing further a private sector in roads. As I cannot anticipate what he will say, I hope that my hon. Friend will understand if I am not in a position yet to say much about the way forward.
I shall say something about the story so far. The area where we have seen most consistent success has been the funding by developers of some or all of the costs of road schemes that can benefit their developments. There has been a fruitful partnership between them and Government at both national and local level. Since April 1986, developers have contributed about £12 million by means of agreements under section 278 of the Highways Act 1980

towards the costs of 58 schemes on the national road network. The pace is quickening, and another 50 or so schemes are at an advanced stage of preparation.
Even larger numbers of schemes undertaken by local highways authorities have been wholly or partly funded by developers through agreements under section 52 of the Town and Country Planning Act 1971. Again, the scale of activity is growing.
In many ways, those successes have gone largely unremarked and, understandably, attention has been focused more on the big, privately financed infrastructure projects. The Channel tunnel is the pre-eminent example, but the Dartford bridge, the extension to the docklands light railway and the new high-speed rail link from Paddington to Heathrow are other examples where private sector finance is contributing to the provision of transport infrastructure. The second Severn crossing, the new high-speed rail link to the Channel tunnel and privately operated light rail systems in Manchester, and perhaps in Avon and elsewhere, are further examples of where the private sector may have a major contribution to make.
The Government are determined to move the provision of transport services, and the infrastructure needed to support them, nearer to the market place. It is only in that way that we can ensure that services are responsive to what the customer wants and not to what the centre prescribes. By progressively opening up to the private sector the opportunity to finance, design, build and operate the supporting infrastructure, we can also give full scope to entrepreneurial imagination and the sort of management skills that are not always evident in the public sector.
The question that my hon. Friend raised this evening is whether, as things stand at present, the private sector can be expected to make a contribution to developing the infrastructure that we shall need or whether we need a significant change in the present arrangements to ensure that private investment is readily forthcoming.
My hon. Friend has suggested that the time scales involved in major projects are such that private investors will be discouraged by the long pay-back periods. He has argued that, by offering tax incentives, we can expect the private sector to generate sufficient cash up front to get major private sector projects off the ground. He argued that, even then, revenues from the toll booth or fare box may be insufficient to remunerate fully the large sums involved. Therefore, Government may still need to make a contribution, perhaps based on the volume of traffic using a privately built road or passengers using a railway. I accept that pay-back periods can be long and that what my hon. Friend proposes may offer a solution, but I am not so sure whether the problems warrant special treatment of private investment in one particular area.
I would not want to dismiss my hon. Friend's proposals out of hand, but experience to date suggests the long pay-back periods of major projects may not be as insuperable a problem as perhaps my hon. Friend fears. It has not been a problem with the Channel tunnel or with infrastructure developments which have been firmly in the private sector for many years—Felixstowe is one obvious example—or a more recent development, such as the London City airport.
I do not accept the accusation made by some that we are stifling private finance. The examples I have given are enough to dispel such a notion, but I accept the need for clear ground rules on private finance within which the private sector can operate. To an extent, they are still


evolving, but some of the principles governing the introduction of private finance are unlikely to change. Most important—my hon. Friend recognised this—is the Government's belief that a privately financed and operated piece of transport infrastructure should be genuinely private sector.
The promoters must carry the risks associated with transport infrastructure projects, not the Government. The users of the infrastructure should generally reimburse the cost of developments—again, not the Government. That tends to rule out so-called shadow tolls.
There has been some misunderstanding about the Ryrie rules. They are designed to test whether it makes sense to undertake a project in the public or private sectors. If it is to be in the private sector, that is where the risks must be taken and any extra costs resulting from the use of private finance should be offset by the transfer of risk to the private sector. The Ryrie rules have not stopped a number of major privately financed infrastructure projects which might have been built in the public sector, but which were not.
There are some sorts of deal, however, which may masquerade as "private finance" of no benefit to the taxpayer. We are not interested in accounting arrangements which mean public expenditure by another name; or in arrangements simply designed to circumvent controls on public expenditure. We are not attracted to projects which require guarantees from the state.
There are other issues which I know concern potential promoters of private sector infrastructure. "Exclusivity" seems to feature strongly. In my discussions with the private sector, many firms have argued that the originator of an idea should have exclusive rights to it for a period; or should be financially recompensed if someone else uses the idea. Otherwise, so the argument goes, firms will be unwilling to spend time and money developing an idea.
I can see the attraction of this argument, and I confess that it has some merit. On the other hand, there are very strong arguments for competition. As my hon. Friend will recognise, it is difficult to square the Government's general commitment to competition with the case for exclusivity, and I fear that there is no neat answer. Nevertheless, it is clearly a matter of genuine concern to many firms and, even if we cannot agree to exclusivity as such, we must ensure that there is some way in which to recognise the money and effort firms spend on developing ideas.
Additionality is another issue which frequently comes up as a bone of contention, but I am not sure just how

important it really is from the private sector's point of view, despite the fact that it is often raised. I suspect that it reflects the fact that many of the promoters or potential promoters of new infrastructure, particularly roads, are construction companies. Seen in their terms, I can understand why additionality should matter. Any construction company worth its salt will want private sector developments to be additional to the public sector programme because it means more business, but there is no immutable law which says that construction companies are the natural promoters of new private roads, for example. Indeed, to judge from the private sector generally, one would expect that not to be the case. The usual experience is that construction companies build what othes want and can finance.
I suspect that in time we shall find the same is increasingly true of privately financed transport infrastructure. Once we get to that stage, promoters will evaluate projects on their merits. They will no longer be seen as simply another opportunity for extra construction activity, and additionality as an issue will lose much of its force.
I should like to say a word finally about environmental issues. If ever we needed reminding about the importance which the public attaches to such questions, the reaction to British Rail's proposals for routing the new high-speed line through Kent has obviously brought it home to us all. It is difficult to over-estimate the interest which the public takes in the environmental aspects of new infrastructure developments. We of course expect the private sector to bring new ideas, but there can be no reduction in the environmental standards which apply to privately financed roads or railways. The public will demand that the same high standards apply as in public sector developments. So will the Government.
It is difficult to do full justice—I apologise to my hon. Friend for this—to the many aspects of private investment in transport infrastructure, particularly at a time when the Government are about to bring forward some proposals. However, the Government have, in the run-up to the new proposals, encouraged a wide-ranging debate over the last year or two, and have been pleased by the interest shown and the quality of the ideas that have been brought forward. Obviously, the Government will respond shortly to that debate.
I thank my hon. Friend for the very keen interest he has shown in those matters, for the opportunity for a debate tonight, and for contributing, I believe very valuably, to the debate with a most interesting and thoughtful speech.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes to One o'clock.